Oil Giants Go Green: IOCL, BPCL, HPCL Launch Rs 1,320 Crore Biodiesel Procurement Plan
State-run oil giants IOCL, BPCL, and HPCL launch a Rs 1,320 crore tender to procure 15 crore litres of biodiesel for blending.
In a massive push toward renewable energy, India's three state-run oil marketing giants—Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL)—have unveiled a joint biodiesel procurement plan worth an estimated Rs 1,320 crore.
The companies have floated a joint tender to acquire 15 crore litres of biodiesel. With a base price set at Rs 88 per litre, the total indicative value of the procurement stands at Rs 1,320 crore, though this figure excludes GST and transportation costs.
Timeline and Logistics of the Mega Tender
According to the Expression of Interest (EOI) issued on October 30, this procurement is slated for the period between November 2026 and January 2027. The scale of the operation is vast, with biodiesel supplies required to be delivered across 85 different locations throughout the country.
The procurement focuses on B100 biodiesel, which can be produced from several sources, including:
- Used Cooking Oil (UCO)
- Non-UCO feedstocks
- A combination of both
To ensure quality, all supplies must adhere to the Bureau of Indian Standards specification IS 15607:2022. Furthermore, the technical requirements vary by location; 98,286 kilolitres (KL) must have a maximum cold filter plugging point (CFPP) of 6 degrees Celsius, while the remaining 51,714 KL must meet a maximum CFPP of 12 degrees Celsius.
Strict Quality and Eligibility Norms
The oil marketing companies are not opening the doors to everyone. Bids are invited only from registered suppliers who have already qualified through the companies' empanelment process. To be considered for allocation, a supplier must be able to offer a minimum quantity of 100 KL.
For those producing biodiesel from used cooking oil, there is an added layer of verification. Bidders must provide a type certificate from the CSIR-Indian Institute of Petroleum in Dehradun to prove the fuel meets the required quality standards.
The Bigger Picture: Waste to Fuel
This initiative is part of the Ministry of Petroleum and Natural Gas's broader biodiesel-blended diesel programme. By blending biodiesel—a renewable fuel derived from animal fats, vegetable oils, and discarded cooking oil—with conventional diesel, India aims to reduce its reliance on fossil fuels.
Beyond the environmental benefits, this move encourages an organized ecosystem for collecting and processing used cooking oil from hotels, restaurants, and other food establishments, effectively turning waste into a valuable energy resource.
Financial Terms and Penalties
The tender outlines specific financial and operational guidelines to ensure a steady supply chain:
- Taxation: A 5 per cent GST is applicable on the biodiesel.
- Transportation: Charges will be calculated separately based on the distance from the supplier's plant to the delivery point.
- Security: A security deposit of 3 per cent of the basic cost of the allocated quantity is required.
- Payment: Suppliers will receive payment within 21 days after the material is received and documents are submitted.
The companies have also implemented strict delivery quotas. Vendors must fulfill at least 90 per cent of their monthly purchase orders or 95 per cent of the total quantity over the procurement period. Failure to do so could result in a 3 per cent price reduction on the basic value of the shortfall.
Interested and eligible bidders have until November 7, 2026, to submit their proposals.