Govt should hike maize-based ethanol procurement rate by 9% to Rs 75 per litre: AIDA

NEW DELHI: All India Distillers’ Association (AIDA) on Monday demanded that the government should increase the procurement rate of maize-based ethanol to Rs 75 per litre for making it remunerative for suppliers.

The association, which represents India’s bioethanol and alcohol manufacturing industry, also sought a clear roadmap for the Ethanol Blending Programme (EBP).

On October 16, Bharat Petroleum Corporation Ltd (BPCL) issued a tender on behalf of oil marketing companies (OMCs), seeking bids for around 11 billion litres of ethanol for the supply year beginning November to meet the requirement of doping 20 per cent ethanol in petrol.


It also reduced the incentive for maize-based ethanol, lowering the procurement price to Rs 68.86 per litre from Rs 71.86.

"The government should consider revising the incentive and pricing structure for maize-based ethanol to ensure that production remains economically viable and investments in grain-based distilleries are sustained, "AIDA President Vijendra Singh told reporters here.

He said the ethanol manufacturers would not be able to make profit at current prices as prices of maize have increased to Rs 27 per kg from Rs 17-18 per kg a year ago.

Singh said there are other costs, including the interest burden.

He suggested that the prices should be revised to Rs 75 per litre.

Singh pointed out that the plants are not operating at 100 per cent capacity. The total installed capacity is about 2,000 crore litres, of which 1,300 crore litre capacities are in grain-based ethanol plants.

The AIDA President also demanded that the government should gradually increase the percentage of blending from the current 20 per cent and also promote flex vehicles as it is doing in the case of electrical vehicles.

Earlier, the association had hailed the Centre's decision to adopt a balanced and considered approach in the Ethanol Supply Year (ESY) 2026–27 tender, taking into account the evolving feedstock landscape, agricultural priorities and the country’s growing ethanol requirements.

AIDA has maintained that no single feedstock should be disproportionately favoured at the expense of others. Instead, all viable feedstocks must receive appropriate policy support and remunerative pricing.

"Maize-based ethanol production involves significant raw material procurement, processing and operational costs. Appropriate incentive support is important to sustain investments in grain-based distilleries, strengthen domestic agricultural supply chains and create stable market opportunities for maize farmers," it had said.

The AIDA has also sought an upward revision of procurement prices for FCI Rice-Based Ethanol. At the current procurement price of Rs 60.32 per litre, the cost of procuring and processing FCI rice leaves extremely limited margins for distillers and, in several cases, makes production economically unviable.