The Centre on Friday rejected calls for selling lower ethanol blends such as E10 petrol alongside E20, saying multiple fuel grades would create major logistical challenges and affect investments made in ethanol production
infrastructure.
The Ministry of Petroleum and Natural Gas said India’s extensive fuel distribution network, comprising over one lakh retail outlets, refineries, terminals, depots and pipelines, would face significant operational difficulties if different petrol blends were maintained simultaneously.
Managing separate inventories would increase costs, complicate supply chains and reduce efficiency, the ministry said.
The government highlighted that nearly ₹1 lakh crore of annual investments have been made by public sector banks in ethanol production and related infrastructure over recent years.
Dedicated ethanol plants, distilleries, storage facilities and transportation networks have been developed to achieve India’s blending targets.
The ministry questioned the feasibility of reversing the policy after such large-scale investments involving farmers, cooperatives, entrepreneurs, financial institutions and public sector companies.
Acknowledging concerns around fuel efficiency, the government admitted that E20 petrol can lead to a 3-5% reduction in mileage compared with conventional petrol.
However, it said the blend offers advantages such as higher octane levels, improved anti-knock properties, faster combustion, smoother acceleration and cleaner engine performance.
The ministry said E20 was introduced after scientific studies, extensive testing and consultations involving institutions such as NITI Aayog and the automobile industry.
Experts also argued that despite some mileage impact, ethanol blending supports India’s energy security by reducing dependence on imported crude oil.
Prashant Vashisht, VP and Co-Head of Corporate Ratings at ICRA, said ethanol blending was a step towards greater self-reliance as India imports a large share of its crude oil requirements.
Automobile industry executives said vehicles underwent testing and certification before the introduction of E20.
Toyota Kirloskar Motor’s Vikram Gulati said older vehicles were also tested before the fuel transition, while E85 stations are intended only for flex-fuel vehicles.
The government clarified that E20 petrol is not cheaper despite ethanol being domestically produced because producers are paid remunerative prices. It said maize-based ethanol is procured at ₹71.86 per litre.
According to the ministry, ethanol blending has helped India save over ₹1.97 lakh crore in foreign exchange, replace nearly 316 lakh metric tonnes of crude oil, reduce carbon emissions and transfer more than ₹1.66 lakh crore to farmers.
Addressing concerns about vehicle damage, the government cited Maruti Suzuki data, stating that millions of vehicles, including older models, have operated without widespread failures linked to E20 fuel.
