State-run OMCs have excluded sugarcane from the ethanol tender for FY27

State-owned oil marketing companies (OMCs) have issued a tender for the supply of approximately 11 billion litres of ethanol to achieve a 20% blending level with petrol for the period from November 2026 to October 2027. The procurement document was issued by Bharat Petroleum Corporation Ltd (BPCL) on October 16.

According to government directives, the diversion of sugar for ethanol production has been reduced to zero in the 2026–27 tender. Ethanol produced from sugarcane juice, sugar or sugar syrup, as well as from B-heavy molasses, has been completely excluded from procurement. Maize, broken rice, surplus rice from the Food Corporation of India (FCI), and C-heavy molasses are permitted as feedstock.

This decision has been made against the backdrop of risks of declining sugar production and limited domestic stocks due to poor rainfall in key growing regions, including Maharashtra and Karnataka. In addition, under the updated procurement terms, incentives for maize-based ethanol producers have been reduced: the procurement price has been lowered from 71.86 rupees to 68.86 rupees per litre.