Sugar-based ethanol has been left out of India’s ethanol tender for the 2026-27 supply year, according to a Reuters report. Citing the tender issued on October 16, the report states that the government has instructed state-run oil marketing companies (OMCs) to ensure no sugar is diverted towards ethanol production for this period. No bids have therefore been invited for ethanol produced using sugarcane juice, sugar or sugar syrup, or B-heavy molasses, the report adds.
- Oil firms invited bids for 11 billion litres of ethanol for 2026-27
- Tender allows bids for ethanol made from corn, broken rice and surplus FCI rice
- Incentive for corn-based ethanol cut from Rs 5.79/litre to Rs 2.79/litre
Tender details
It seeks 11 billion litres for the supply year starting in November 2026
The tender comes from Indian Oil, Bharat Petroleum and Hindustan Petroleum. “The Government of India has issued directions that sugar diversion for ethanol be reduced to zero for ethanol supply year 2026-27,” the tender document said, according to the report.
The companies are looking to procure 11 billion litres of ethanol for the supply year, which kicks off in November 2026. Distillers can submit bids for ethanol produced from corn, broken rice and surplus FCI (Food Corporation of India) rice. Corn-based ethanol will also fetch less this time. Its incentive has dropped by Rs 3 per litre to Rs 2.79 per litre, taking the procurement price from Rs 71.86 per litre to Rs 68.86 per litre, as per the report.
Ethanol blending and sugar supply
India is trying to rein in high sugar prices
Surplus sugar has been a key contributor to India’s ethanol-blending programme for several years. India also consumes more sugar than any other country, and has been trying to increase local production while easing prices.
Reuters had reported in August 2026 that limits on the use of sugarcane for ethanol were being considered for the season starting October 2026. Weaker rains in Maharashtra and Karnataka had already cast doubt on this year’s sugar production at the time.
Ethanol blending is aims to reduce India’s oil imports. E20 petrol, which became compulsory nationwide earlier this year, was introduced to cut emissions as well as the country’s dependence on imported crude. However, diverting sugarcane juice, sugar syrup and B-heavy molasses towards ethanol can lead to a reduction in the amount of sugar produced.