Biofuels production utilizing locally available resources are significantly gaining researchers’ attention due to their contribution in mitigating greenhouse gases (GHGs). But selection of suitable biomass resource is yet not decided for maximum biofuel production. Therefore, in the present article preference selection index (PSI), a Multi-criteria Decision-Making (MCDM) tool is utilized for the selection of appropriate available resources for generating biofuels. To do so, various alternatives such as sunflower, jatropha, cottonseed, neem, Mahua, Palm, and Karanjia are considered based on their valuable properties. These properties include density, cetane number, heating value, saponification, and cost. Rank matrix, normalized \({\mathfrak{R}}_{ij}\) matrix and preference variation, deviation and overall preference values were calculated for selection of best alternatives. The PSI-based MCDM methodology indicates the final ranking as follows: palm, mahua, sunflower, jatropha, neem, cottonseed, and karanjia. The palm alternative, with the highest index value of 0.9818, emerged as the most promising contender, whilst the karanjia, with the lowest index value of 0.8704, was considered as the least favourable candidate for biodiesel application.