BPCL issued a procurement notice on 16 October that will bar sugar‑derived ethanol from the 2026‑27 tender, a move aimed at easing domestic sugar shortages triggered by a weak monsoon in Maharashtra and Karnataka.
Under the revised scheme, the government will buy 11 billion litres of ethanol for the period from November 2026 to October 2027 at a base price of ₹68.86 per litre, down from ₹71.86, and will cut the maize‑based incentive from ₹5.79 to ₹2.79 per litre.
Oil marketers will now source ethanol exclusively from grain or molasses—maize, broken rice, surplus rice procured by the Food Corporation of India and C‑heavy molasses—forcing distilleries that previously relied on sugarcane juice to retool or diversify.
The change comes as India’s 20 % E20 blending programme continues, with petrol suppliers scrambling to secure enough grain‑based ethanol to meet the 2026‑27 quota; the government will also monitor supply chain disruptions and may adjust incentives if shortages arise.