OMCs get offer for 1,776 cr litres ethanol while require just 1,050 cr: ESY 25-26

The Oil Marketing Companies (OMCs) have received an overwhelming response to their tender for ethanol supply for the Ethanol Supply Year (ESY) 2025–26. Against a requirement of about 1,050 crore litres of denatured anhydrous ethanol for Cycle 1, manufacturers across the country have submitted offers totalling 1,776.49 crore litres.

According to data, out of the total offers received, 471.63 crore litres have been proposed from sugarcane-based feedstocks, while a larger share of 1,304.86 crore litres comes from grain-based feedstocks. The robust participation highlights the growing capacity and confidence of ethanol producers, as well as the government’s continued push for ethanol blending in petrol.

In a positive development for grain-based ethanol producers, the government has revised the procurement price of ethanol derived from surplus rice supplied by the Food Corporation of India (FCI). For ESY 2025–26, the price has been set at Rs 60,320 per kilolitre (KL), up from Rs 58,500 per KL in the previous cycle (ESY 2024–25).

Meanwhile, the price of ethanol produced from sugarcane-based feedstocks remains unchanged. However, sugar industry stakeholders are urging the government to revise prices upward in view of the higher Fair and Remunerative Price (FRP) of sugarcane announced for the upcoming 2025–26 sugar season.

The Ethanol Blended Petrol (EBP) Programme, implemented by the government, aims to promote the use of ethanol-blended petrol by OMCs, thereby reducing import dependence on crude oil and supporting India’s renewable energy transition. The latest tender response reflects the success of recent policy measures introduced to boost ethanol production and streamline procurement processes.

Sugar Vs Grain in Ethanol Scenario

The cooperative sugar industry in India has been urging the central government to revise ethanol procurement prices and extend blending targets beyond the current 20% threshold. This demand comes in the wake of a significant shift in the ethanol landscape, where sugar-based ethanol’s contribution has plummeted from 73% to just 28%, while grain-based ethanol continues to rise.

The ongoing surge in grain-based ethanol production poses a challenge to sugar mills, many of which have invested heavily in infrastructure for ethanol production.

On the other hand, the Central Government has also held that diversion of sugar towards ethanol making is crucial for the success of the policy.