The Bihar government has clarified the situation regarding ethanol production and procurement in the state during the ongoing assembly session. Industry Minister Dilip Jaiswal officially stated that agreements are in place to purchase ethanol from 11 established units across the state. While addressing concerns about plant closures, the Minister guaranteed that no operational ethanol plant in Bihar would be allowed to shut down, bringing relief to investors and farmers alike.
What is the current status of Ethanol purchase?
During the assembly session on February 23, 2026, Minister Dilip Jaiswal informed the house that while 11 units have valid purchase agreements, there are 8 other ethanol plants that were set up without the necessary permissions or agreements from the Central Government. Because of this lack of authorization, these specific units do not currently have a purchase contract with Oil Marketing Companies (OMCs).
Currently, petroleum companies are purchasing approximately 35 crore liters of ethanol from Bihar, even though the agreement quota stands at around 46.2 crore liters. The Minister mentioned that the state has a production potential of up to 50 crore liters. To resolve this gap, a state delegation recently met with Union Petroleum Minister Hardeep Singh Puri, who has agreed to ensure the purchase of the entire ethanol production to support the state’s industry.
Why are farmers facing issues with Maize prices?
The issue of falling maize prices was raised by BJP MLA Komal Singh, who highlighted that local maize is selling for ₹13 to ₹16 per kg, a sharp drop from the expected value of ₹26 per kg. This price crash is largely attributed to ethanol units running at only 50% capacity due to reduced buying from oil companies.
Legislators also questioned the new mandate requiring units to use 40% rice from the Food Corporation of India (FCI) instead of locally grown maize. This policy puts pressure on Bihar’s units to use rice, often sourced from other states like Punjab, rather than utilizing the abundant local maize crop.
Current Official Ethanol Prices:
| Type | Price (Per Liter) |
|---|---|
| Maize-based Ethanol | ₹71.86 |
| FCI Rice-based Ethanol | ₹60.32 |
What is the future plan for industry in Bihar?
Despite the challenges, the government is pushing for industrial expansion. The Industry Minister announced plans for 58 new food processing units in the state with a total investment of ₹2,958 crore. A significant portion of this growth is focused on Muzaffarpur, where 30 units are already operating or planned with an investment of ₹714 crore. The government dismissed rumors of permanent plant closures as misinformation spread on social media to create instability.
