Oil marketing companies have issued a tender for about 1,100 crore litres of ethanol for the 2026-27 supply year, and it bars ethanol made from sugarcane juice, sugar, sugar syrup and B-heavy molasses. The tender was dated 16 October 2026, according to The Federal, and the tender text says sugar diversion for ethanol is to be reduced to zero for the year. Spectate Media has not seen the tender document and relies on these reports.
Prices by feedstock
Basic rates, excluding GST, are ₹66.07 a litre for maize, plus an incentive of ₹2.79, ₹64 for damaged food grains, ₹60.32 for surplus Food Corporation of India rice and ₹57.97 for C-heavy molasses, The Federal reported. Transport charges and GST are extra. Deccan Chronicle reported that the maize price was cut to ₹68.86 from ₹71.86 and the incentive from ₹5.79 to ₹2.79. Spectate Media's arithmetic is consistent: ₹66.07 plus ₹2.79 is ₹68.86, and ₹66.07 plus ₹5.79 is ₹71.86.
Terms
The supply period runs from 1 November 2026 to 31 October 2027, in four quarters, and offers based on surplus FCI rice are not accepted for the last quarter. Indian Oil, BPCL, HPCL, Mangalore Refinery and Numaligarh Refinery are the buyers. Suppliers must make ethanol at their own registered or approved distilleries, and trading or sourcing from third parties is prohibited. Allocations for the first quarter depend on pending court proceedings over the oil companies' allocation method, and the companies can revise, reduce, withdraw or cancel allocations under court orders without compensating suppliers. Spectate Media found no later report of a court order on this. Deccan Chronicle links the sugar restriction to poor rainfall in Maharashtra and Karnataka, which raises the risk of lower sugar output. A Hindu headline of 24 October refers to feedstock concerns as rice gains ground over maize; Spectate Media could not open the article.
Key numbers
- Volume sought: About 1,100 crore litres (Supply year from 1 November 2026)
- Maize ethanol price: ₹68.86 a litre (Down from ₹71.86 including incentive)
- Sugar diversion: Zero (Sugar-based feedstocks barred)
- FCI rice rate: ₹60.32 a litre (Excluding GST)
What boards and CFOs should note
Three points stand out. First, distillers that rely on sugar-based feedstock have no volume in this tender. Second, the maize incentive was cut by ₹3 a litre. Third, first-quarter allocations carry a court risk.
Source: The Federal, 17 October 2026. This is a summary of a news report, published as general information. It is not legal, tax or investment advice.
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