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Informist, Thursday, Oct. 9, 2025

 

By Afra Abubacker

 

NEW DELHI – Distillers have offered to supply 17.76 billion litres of ethanol to oil marketing companies in the ethanol supply year 2025-26 (Nov-Oct), according to data from industry sources. This offer is significantly above the 10.5 billion litres tendered by oil marketing companies.

 

On Sept. 23, Bharat Petroleum Corp. Ltd, on behalf of state-owned oil marketing companies, had floated a tender to procure around 10.5 billion litres of ethanol for the first cycle of the upcoming ethanol supply year starting November. The tender closed on Tuesday. India requires about 12 billion litres of ethanol in 2025-26 to achieve 20% blending in petrol uniformly across the country.

 

"This was a very enthusiastic response to the tender. And everybody wants to do maize-ethanol as it is most profitable," G.K. Sood, chairman at MEIR Commodities, told Informist Thursday. 

 

Of the total offer, the share of ethanol from grain-based feedstocks is 13.05 billion litres, with maize alone accounting for 8.32 billion litres. From sugarcane-based feestocks, distillers offered to supply 4.71 billion litres of ethanol in the upcoming ethanol supply year, the data showed.

 

Distillers are mostly keen on supplying ethanol made from maize, as oil marketing companies procure it at a premium. Also, maize is available throughout the year, unlike sugarcane-based feedstocks, which are seasonal. They have also offered to supply a lot of ethanol made from rice, which is sourced from the Food Corp. of India, primarily because the government had mandated it. "Quantity offered from surplus rice sourced from FCI should be a minimum 40% of the total quantity offered from grain-based feedstock," the tender said.

 

The government has compelled biofuel production from FCI rice as it wants to offload surplus rice stocks in its godowns. For 2025–26, it has allocated 5.2 million tonnes of rice to be sold to distillers at a heavily subsidised rate of INR 2,320 per 100 kg, up slightly from INR 2,250 in 2024–25, but still below INR 2,800 per 100 kg in 2023–24.

 

"The allocated 5.2 million tonnes of FCI rice translates to 2.34 billion litres ethanol, which is to be supplied by July," Sood said. However, distillers have offered to supply 3.97 billion litres of ethanol from FCI rice, higher than the allocation. Sood noted that bids for ethanol made from FCI rice rose as distillers had bid heavily for maize-based ethanol, but had to ensure at least 40% of their grain-based feedstock came from FCI rice. 

 

For 2025–26, the government also raised the procurement price of ethanol made from FCI rice to INR 60.32 per litre from INR 58.50. Prices of ethanol made from other feedstocks remain unchanged. Ethanol made from maize continues to fetch the highest rate of INR 71.86 per litre, followed by damaged food grain, at INR 64.00 per litre. 

 

Citing rising production costs, the sugar industry has repeatedly called for higher ethanol prices, but rates have remained mostly unchanged since 2022-23. The rate for ethanol made from C-heavy molasses is INR 57.97 per litre, from sugarcane juice is priced at INR 65.61 per litre, and from B-heavy molasses is INR 60.73 per litre. 

 

The data indicates that distillers continue to favour grain-based feedstocks over sugarcane for the upcoming season. In the past two years, government incentives have shifted ethanol production towards grains such as maize and rice, while sugarcane-based production was curbed to maintain domestic sugar supplies.

 

Oil companies will allocate ethanol supply based on their parameters. "The allocation remains to be seen. It is expected shortly," Sood said. 

 

The following is a table detailing distillers' ethanol supply offers for 2025-26 (Nov-Oct), in million litres, against feedstock: 

 

Feedstock	Supply offers  (in mln ltr)
Sugarcane juice	2,990
B-heavy molasses	1,590
C-heavy molasses	130
Total sugarcane-based feeds	4,710
Maize	8,320
FCI rice	3,970
Damaged foodgrain	760
Total grain-based feeds	13,050
Grand total	17,760

 

End

 

Edited by Tanima Banerjee

 

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