NEW DELHI: Three state-owned oil marketing companies (OMCs) -Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) – have launched a joint tender to procure 15 crore litres of biodiesel over a three-month period from November 2026 to January 2027. The base price has been fixed at Rs 88 per litre, PTI reported.
Under the tender issued on October 30, the companies intend to purchase 1.5 lakh kilolitres of pure biodiesel, or B100, for delivery at 85 locations across the country. Suppliers have been asked to submit their bids by November 7.
The procurement includes biodiesel manufactured from used cooking oil (UCO) and other feedstocks. The quoted price does not include the 5% goods and services tax (GST) applicable to biodiesel or transportation charges, which will be paid separately based on the distance to the delivery location.
The purchase is part of the OMCs’ efforts to increase the use of domestically produced low-carbon fuels and reduce the country’s reliance on imported crude oil. Following the achievement of 20% ethanol blending in petrol, India is seeking to accelerate the adoption of biodiesel in the diesel segment, according to PTI.
The tender is also expected to encourage organised collection of discarded cooking oil from restaurants, hotels and other food establishments. Using UCO as a biodiesel feedstock provides an avenue for converting waste into fuel while creating demand for its collection and processing.
At the stipulated base price, the total procurement is valued at Rs 1,320 crore, excluding GST and transportation expenses. The tender could provide a sizeable business opportunity for domestic biodiesel producers and feedstock suppliers, while supporting manufacturing capacity and the development of a structured UCO collection network.
Separate quality requirements for winter supplies
The tender has prescribed two quality categories based on the Cold Filter Plugging Point (CFPP) of biodiesel. Suppliers must provide 98,286 kilolitres of fuel with a CFPP of up to 6 degrees Celsius and another 51,714 kilolitres with a maximum CFPP of 12 degrees Celsius.
CFPP refers to the temperature at which fuel begins to clog filters. The two specified limits are intended to ensure that the biodiesel remains suitable for use across varying winter conditions.
Only suppliers that have qualified through the OMCs’ previous empanelment process will be eligible to participate. Each bidder must quote for at least 100 kilolitres and possess type certification confirming compliance with the latest IS 15607 standard.
In addition, suppliers offering biodiesel made from used cooking oil must furnish a certificate from the CSIR-Indian Institute of Petroleum, Dehradun.
Delivery obligations and payment terms
The OMCs will assess bids separately for the two CFPP categories. If the quantities offered exceed the requirement in either category, the companies will proportionately reduce the allocations before distributing the procurement among their respective locations.
Suppliers must fulfil at least 90% of their prorated monthly order or indent quantity, whichever is lower. Where monthly delivery targets are not achieved, they will be required to meet 95% of the overall prorated requirement. A 3% deduction from the base price will apply to the quantity not supplied.
The tender also requires suppliers to furnish a security deposit equivalent to 3% of the base value of their allocated quantity. Transportation and transit insurance expenses will be borne by the suppliers. Payments will be made within 21 days after delivery and submission of the required documents.
The OMCs can shift up to 20% of a supplier’s allocated quantity to another delivery location, with transportation charged at the applicable delivered cost. They may also procure up to 10% above the original allocation, subject to mutual consent.
The tender does not specify the final biodiesel blending percentage or the individual procurement quantities of IOC, BPCL and HPCL. These will be determined based on qualified bids and subsequent supply orders, PTI reported.
