New Delhi, October 17, 2026 (Yes Punjab News)
The Centre has directed state-owned fuel retailers to stop procuring ethanol made from sugar and key sugarcane-based feedstocks from November 1, aiming to contain sugar prices amid concerns over lower sugarcane production following a weak monsoon.
The restriction will apply from the beginning of the new ethanol supply year, according to a tender document issued by public sector oil companies.
Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), Numaligarh Refinery Ltd and Mangalore Refinery and Petrochemicals Ltd have jointly invited bids for nearly 11 billion litres of ethanol for the new supply year, incorporating the government’s latest directions.
The tender excludes ethanol produced from sugarcane juice, sugar, sugar syrup and B-Heavy molasses.
India, the world’s second-largest sugar producer, is facing the prospect of a smaller sugar crop than a year earlier after El Niño contributed to the weakest monsoon in more than a decade, the report said.
The country has increasingly relied on sugarcane and grain-based ethanol as part of its efforts to reduce dependence on imported crude oil. The government had advanced its target of achieving 20 per cent ethanol blending in petrol by five years and reached the goal in 2025.
Under the latest tender, suppliers can offer ethanol produced from C-Heavy molasses, damaged food grains, surplus rice procured by the Food Corporation of India, corn and other feedstocks permitted under the National Policy on Biofuels.
Separately, the government has allowed sugar mills to sell sugar produced in October 2026 during October and November, over and above their regular monthly release quotas.
Under the order, a mill producing 1,000 metric tonnes of sugar in October can sell that quantity across the two months in addition to the quantities allocated under its regular monthly quotas.
The measures come as the government seeks to manage sugar availability and prices while balancing the country’s ethanol-blending programme with concerns over sugarcane output.
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