India bars sugar-based ethanol in 2026-27 tender, cuts maize incentive

The restrictions mark a shift in feedstock sourcing for the ethanol-blended petrol programme, which has relied on both grain-based and sugarcane-based ethanol to reduce crude oil imports and cut vehicle emissions. Representative file image. | Photo Credit: Getty Images/iStockphoto

State-run oil marketing companies have barred ethanol made from sugarcane juice, sugar syrup and B-heavy molasses from their latest procurement tender for the 2026-27 supply year for blending in petrol, as the government seeks to protect domestic sugar supplies while sustaining its nationwide petrol-blending programme.

The tender, issued on October 16 by Bharat Petroleum Corporation Limited (BPCL) on behalf of oil marketing companies (OMCs), seeks bids for around 11 billion litres of ethanol for the supply year beginning in November to meet the requirement of doping 20% ethanol in petrol. It also cuts the incentive for maize-based ethanol, lowering the procurement price to ₹68.86 per litre from ₹71.86.

“The Government of India has issued directions that sugar diversion for ethanol be reduced to zero for the ethanol supply year 2026-27,” the tender document said.