The ethanol procurement policy governs how oil marketing companies—IOC, BPCL and HPCL—purchase ethanol for blending with petrol. For any distillery or grain-based manufacturer, understanding this policy is essential because it outlines the commercial, technical and compliance requirements for supplying ethanol to OMCs.
The policy affects your profitability, the routes you can choose, the price at which your ethanol is purchased, and the likelihood of your bid being accepted in the OMC tender. It also defines operational obligations such as supply timelines, quality standards, logistics protocols, and audit checks.
The tender process is central to securing allocations under the ethanol procurement policy. OMCs release annual tenders that distilleries and suppliers must participate in to supply ethanol under ESY (Ethanol Supply Year).
The tender document usually includes:
Businesses must create an account on the unified procurement platform and submit all required documentation. This step ensures your credentials are verified before the bid.
This includes:
Although pricing is pre-determined, you must submit quantity bids depot-wise along with your intended supply plan.
OMCs conduct a detailed review of:
Allocation is based on a combination of:
Once your bid is approved, a formal ethanol supply contract is executed specifying:
The government provides fixed ex-mill ethanol prices for each feedstock route. These prices play a major role in determining profitability and production strategy.
| Feedstock Route | Ex-Mill Price (₹/L) | Business Interpretation |
|---|---|---|
| C-heavy molasses | ~46–48 | Lowest price, low yield, least preferred |
| B-heavy molasses | ~49–52 | Balanced price and blending efficiency |
| Sugarcane juice | ~60–63 | Highest priority and higher margins |
| Damaged Food Grains (DFG) | ~56–59 | Viable for grain processors |
| Maize | ~60–62 | Higher margins but costlier feedstock |
To participate successfully in the OMC ethanol tender, suppliers must satisfy both operational and regulatory prerequisites.
Businesses often underestimate the importance of accurate tank calibration charts and logistic readiness—these small details frequently lead to tender rejection.
A complete documentation set strengthens your bid and reduces the risk of rejection.
Missing or outdated approvals—especially PESO and Pollution NOCs—remain the most common reasons for disqualification.
OMCs do not allocate ethanol proportionally to all applicants. Instead, they follow a structured evaluation mechanism.
Below is an indicative distribution trend:
| Supplier Type | Typical Allocation Preference | Reason |
|---|---|---|
| Juice-based | High | Supports blending targets |
| B-heavy | Medium | Balanced route |
| Grain-based | Moderate | Growing route |
| C-heavy | Low | Least efficient |
A solid understanding of these clauses helps suppliers avoid operational disputes.
Failure to meet compliance standards can be costly.
A mid-sized distillery in Haryana (capacity ~45 KLPD) repeatedly failed to secure meaningful OMC allocations. For three consecutive ESYs, they were allotted less than 10% of their bid quantity.
The company engaged compliance consultants who carried out a full audit of their tender readiness. The following improvements were made:
Most suppliers lose tenders not because of low capacity, but due to documentation gaps and weak bidding strategy. Aligning documentation, capacity, and depot strategy can transform tender outcomes.
The ethanol procurement policy 2025 and OMC tender framework create a structured, transparent system for ethanol suppliers. For businesses, success depends on:
Suppliers who prepare early, validate their documents, and optimize their production route generally secure higher quantities and more profitable contracts.
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It is the government framework that guides how OMCs purchase ethanol, including pricing, eligibility, documents, and ESY-based supply timelines.
Suppliers submit a technical and financial bid online, undergo evaluation, and sign an ethanol supply contract if approved by the OMC.
Prices range by feedstock route: C-heavy (₹46–48), B-heavy (₹49–52), juice (₹60–63), DFG (₹56–59), maize (₹60–62).
Distilleries with valid Excise licenses, Pollution NOCs, PESO approvals, calibrated tanks, and adequate production and storage capacity.
Key documents include Excise license, Air/Water NOC, PESO license, GST, PAN, factory license, capacity certificates, plant layout, and feedstock approvals.
