This, many experts said, also points to the fact that there is no shortage of feedstock in India for ethanol production, despite reports to the contrary.
Sources said that out of the 1.93 billion litres of ethanol promised to be supplied to the OMCs for 20 per cent blending with petrol in 2026-27, an overwhelming quantity of around 1.14 billion litres (around 59 per cent) will come from maize, while damaged and surplus foodgrains, which largely come from the Food Corporation of India (FCI) and other sources, will contribute around 0.69 billion litres.
Sugarcane, which has been permitted for ethanol production in the 2026-27 season only through the C-heavy molasses route, is expected to contribute around 0.097 billion litres in 2026-27.
This, trade and industry sources said, clearly proves that maize, along with damaged and surplus foodgrains, will continue to be the dominant source of ethanol production even in the 2026-27 season, a trend that has been followed for several years.
A few weeks ago, the OMCs floated a tender to procure around 1.10 billion litres of ethanol to keep the blending programme running in the 2026-27 season as well.
The tender excluded ethanol produced from sugarcane juice, sugar syrup and B-heavy molasses but permitted ethanol production from C-heavy molasses.
Sources said this was meant to conserve sugar in the coming year, when supplies are expected to tighten, as less sugar is diverted when ethanol is produced from C-heavy molasses.
India has relied for years on surplus sugar to meet its ethanol-blending targets, but the exclusion of sugar-based feedstocks underscores the growing tension between cutting oil imports and protecting domestic sugar supplies, as poor rainfall threatens output and pushes prices to record highs.
“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.
“No offers have been sought for ethanol produced from sugarcane juice, sugar or sugar syrup and B-heavy molasses in this quantity bid tender,” it said.
The tender allows manufacturers to bid for ethanol made from maize, broken rice and surplus rice procured by the Food Corporation of India, according to the document jointly issued by state-run Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation.
The world’s biggest sugar consumer has been trying to boost domestic sugar production and bring down record-high prices.
The government made E20 the mandatory nationwide standard earlier this year to curb pollution and cut oil imports, but some motorists fear the blend could damage older vehicles.
The oil companies also cut the incentive for maize-based ethanol to ₹2.79 per litre from ₹5.79, bringing the procurement price down to ₹68.86 per litre from ₹71.86, according to the tender documents.
