Government data shows oil marketing companies are spending more on ethanol than on petrol. In FY27 so far, crude oil averaged ₹57.4 per litre, while ethanol procurement cost ₹70.2 per litre. OMCs purchased 705 crore litres of ethanol worth ₹49,577 crore till June 2026.
Ethanol prices have stayed flat at around ₹71 per litre in recent years, while crude oil prices fluctuated. Over three ethanol supply years, OMCs spent ₹1.72 lakh crore on procurement. Uttar Pradesh led ethanol‑blended petrol sales with nearly 125 crore litres in ESY 2024‑25.
India has 501 registered ethanol manufacturing units as of July 2026. Ethanol is produced from sugarcane molasses, surplus rice, maize and damaged grains. Though costlier than crude, ethanol blending reduces import dependence and supports farmers.
The higher procurement bill raises concerns about fiscal burden and consumer impact, as retail petrol prices remain elevated. Yet, the ethanol programme is seen as vital for energy security and diversification of fuel sources.
This balance between cost and long‑term energy goals remains central to India’s ethanol push.
