No sugar diversion for ethanol production: Govt to OMCs
The OMCs have floated a cumulative requirement of 1,100 crore litres with 300 crore litres to be supplied in the first two quarters and 250 crore litres each in the last two quarters
The Indian government has instructed oil marketing companies (OMCs) to cease ethanol production using sugarcane juice, sugar, sugar syrup, and B-Heavy molasses. This decision comes as there is anticipated to be a low sugar output and high domestic retail prices. In response to this directive, the OMCs have issued a tender for the upcoming ethanol supply year (ESY) 2026-27, which runs from November 2026 to October 2027.
The tender specifies that ethanol will be produced from various feedstocks, including C-Heavy molasses, damaged food grains, surplus rice from FCI, maize, and other feedstocks as per the National Policy on Biofuels (NPB). Bidders are required to offer ethanol in kilolitres (KL), categorized quarter-wise, against the OMCs' demand of 1,100 crore litres.
Producers will be paid varying prices for ethanol sourced from different feedstocks, with an additional incentive of ₹2.79 per litre for maize-based ethanol. The government is expected to release its own estimates for sugar production for the 2026-27 season in the near future.
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