The latest tender floated by the state-run Oil Marketing Companies (OMCs) on Thursday for procuring ethanol for blending with petrol excludes ethanol made from sugarcane juice (SCJ) and B-Heavy Molasses (BHM).

Bharat Petroleum Corporation (BPCL) floated a tender for the supply of around 267 crore litres of denatured anhydrous ethanol for the ethanol supply year 2023-24 (November-October). The ethanol will be supplied to the specified facilities for the OMCs.

“Quantity bids for the ESY 2023-24, period of February 1 to October 31 are being opened for registered bidders as per long term ethanol procurement policy,” the tender document said.

The bidders shall quote ethanol quantities to be supplied by them against quarterly requirements of OMCs, feedstock category wise in the quantity bid, it added.

Ethanol tender

The OMCs tender is for ethanol produced from C-Heavy Molasses (CHM), damaged food grains and maize. A minimum quantity of 100 kilo litres (KL) must be offered against any feedstock in a quarter.

BPCL is the central procurement agency for Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Mangalore Refinery and Petrochemicals (MRPL).

The OMCs are offering a price of ₹56.28 per litre for ethanol made from CHM, ₹71.86 a litre for maize and ₹64 per litre for ethanol made from damaged foodgrains.

On December 7, the government banned sugar mills and distilleries from using sugarcane juice or sugar syrup for producing ethanol with immediate effect to ensure adequate availability of sugar for domestic consumption. However, the ban is a “temporary pause” due to a lack of clarity on sugar output for the current season.

Last month, the OMCs released an indicative allocation list, which earmarked 42.56 crore litres to be produced from SCJ for which 7 lakh tonnes of sugar will be diverted. For BHM, a quantity of 114.76 crore litres has been allocated which will lead to 10 lakh tonnes of sugar diversion. This allocation is for two quarters-November 2023-April 2024 period.

Earlier, the OMCs had allocated 135.43 crore litres of ethanol to be produced from SCJ and 130.13 crore litres from BHM for the same period.

During ESY 2022-23, the OMCs floated a tender for 599.7 crore litres of ethanol, against which letters of intent (LoIs) for 567 crore litres were issued. During the year, SCJ accounted for 25 per cent of the ethanol production, BHM (45 per cent), CHM (1 per cent) and food grains (29 per cent).

India achieved the target of 12 per cent blending of ethanol with petrol in ESY 2022-23 and 10 per cent blending in ESY 2021-22. The Ministry of Petroleum and Natural Gas (MoPNG) has set a target of achieving a steep 15 per cent blending in ESY 2023-24 (November 2023-October 2024).

(With inputs from Prabhudatta Mishra)