In order to control sugar prices, the Central Government has directed the government fuel companies to stop purchasing ethanol prepared from the major raw materials of sugar and sugarcane. According to the tender document, this directive will be applicable from the new supply year starting from November 1 after dry weather has affected the sugarcane production.
State-run oil refinery companies – Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), Numaligarh Refinery Limited and Mangalore Refinery and Petrochemicals Limited have issued a joint tender to procure about 1,100 crore liters of ethanol for the new supply year, citing the new instructions of the government.
“In this quantity-based tender, no offers have been sought for ethanol produced from sugarcane juice, sugar, sugar syrup and B-heavy molasses,” according to the document.
India, the world's second largest sugar producer, is facing a situation of lower production this year compared to last year. The weakest monsoon recorded in more than a decade due to the impact of El Nino affected the sugarcane crop.
India is continuously increasing the use of sugarcane and grains for ethanol production in efforts to reduce dependence on imported oil.
Suppliers participating in the new tender can offer ethanol produced from C-heavy molasses, spoiled food grains, surplus rice purchased from Food Corporation of India (FCI), maize and other raw materials permitted under the National Biofuel Policy.
Further, the Government has permitted sugar mills to sell sugar produced in October 2026 (over and above the regular monthly release quota) during October and November 2026.
According to the government order, if a sugar mill produces 1,000 metric tonnes of sugar during October, it can sell this quantity in October and November. This sale will be in addition to the quantity allocated under the regular monthly release quota.