India’s ethanol blending programme continues to scale up, with 3.9 million tonnes of surplus rice from the Food Corporation of India (FCI) and 6.8 million tonnes of maize used for ethanol production till June 2026 in the current Ethanol Supply Year (ESY 2025-26), according to a written response by Minister of State for Petroleum & Natural Gas Suresh Gopi in the Rajya Sabha on Monday.
Ethanol Feedstock and Food Security
Gopi emphasised that the government's policy permits only surplus foodgrains — as determined by the Department of Food & Public Distribution after meeting all requirements under the National Food Security Act (NFSA), Other Welfare Schemes (OWS), and maintaining prescribed buffer stocks — for ethanol production. He stated, “The target of 20 per cent ethanol blending has not affected food crop availability or India’s food security.”
The programme follows a “waste-to-wealth” approach, utilising surplus agricultural produce, including damaged foodgrains, broken rice, and foodgrains unfit for human consumption, as well as other approved feedstocks that might otherwise remain underutilised or deteriorate in storage, the Minister added.
Impact on Retail Prices
Regarding sugar, Gopi noted that the average retail price of sugar in the country is presently in a reasonable range, with only surplus sugar diverted for ethanol production. The annual increase in retail sugar prices is around 2.5 per cent compared to the previous sugar season 2024-25. For rice, he clarified that there is no impact on retail food inflation from the diversion of surplus FCI rice, as only excess rice after meeting NFSA and OWS requirements is used.
Ethanol Procurement Trends
In a separate response, Gopi provided data on ethanol procurement by PSU oil marketing companies (OMCs) across recent ESYs:
| ESY (Period) | Ethanol Procured (crore litres) | Cost (₹ crore) |
|---|---|---|
| ESY 2023-24 (Nov 2023-Oct 2024) | 679.04 | 48,757.01 |
| ESY 2024-25 (Nov 2024-Oct 2025) | 1,033.31 | 73,996.48 |
| ESY 2025-26 (till June 2026) | 705.43 | 49,577.36 |
The Minister also clarified that there is no proposal to mandate the availability of non-blended or lower-blend petrol at select retail outlets. The government’s policy is to progressively transition towards cleaner, technologically superior, and environmentally sustainable fuels in accordance with the National Policy on Biofuels and the Ethanol Blended Petrol (EBP) Programme.
Outlook
The continued ramp-up in ethanol production from surplus FCI rice and maize underscores India’s commitment to the 20% blending target. For commodity traders and procurement teams, the steady demand for maize as a feedstock supports market prices, while the utilisation of FCI rice provides an alternative outlet for government stocks. The absence of any plan for lower-blend petrol suggests that blending will remain mandatory, sustaining demand for ethanol feedstocks. Upcoming data releases on FCI rice off-take and maize arrivals will be critical for assessing supply-demand balances in the coming months.
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