Govt admits E20 'may reduce' mileage by 3-5%. Here's what it says about fuel prices, choices of blends

Amid growing criticism of the Ethanol Blended Programme (EBP) to blend 20 per cent ethanol into fuels across the country, the petroleum ministry on Friday admitted that E20 fuel "may reduce" mileage by 3-5 per cent.

This comes after months of social media backlash against the EBP, which has seen the rapid rollout of E20 fuel across the country since April 2025, despite it being scheduled for 2030.

"Mileage is only one parameter. E20 offers a significantly higher-octane rating, superior anti-knock characteristics, faster combustion, better pickup, smoother acceleration and cleaner engine operation. It produces negligible particulate emissions and substantially reduces life cycle carbon emissions by around 40 per cent," the ministry said in a note.

The social media backlash has been mainly focused on the mileage drop due to the use of E20 fuel, as well as the alleged damage to older E10-compliant vehicles.

On price drops

The Ministry of Petroleum and Natural Gas (MoPNG) also answered another crucial question that has dominated social media discussions on the E20 mandate: why are fuel prices not dropping, to offset the mileage drop?

The MoPNG explains that despite E20 having more ethanol content than E10 or E0 fuel, it is "actually costlier to produce than pure petrol", asssuming crude prices are $70 a barrel.

It claimed that ethanol becomes cheaper to produce once crude prices shoot up to $120-130 per barrel.

It added that the benefit of using E20 over E10 was not in reduced prices at the pump, but insulation from volatile crude prices.

"Nearly 20 per cent of every litre of petrol sold in India today is domestically produced ethanol. That ethanol is procured at around Rs 71 per litre, a price that does not fluctuate every morning with Brent crude, geopolitical conflicts or shipping disruptions," the note said.

On choices at the pump

A key demand at the E20 protest led by Tehseen Poonawalla has been to allow people the right to choose by offering various blends of fuel across the country—E20, E10, E5, E0.

"Progress means embracing better technology," the ministry says in its note, citing examples of why offering other blends would hamper its ethanol infrastructure, comprising dedicated ethanol plants, distilleries, storage facilities, logistics networks, and investments from public-sector banks, farmers, and cooperatives.

"Would anyone argue that we should return to pothole-ridden roads because they were familiar? Would Delhi replace cleaner transport fuels with more polluting alternatives?" the MoPNG added, calling the demand to rollout multiple blends a "retreat to an inferior standard".

Read the full version of the MoPNG's Q&A here (for tables and annexures, click here):

Q) Why did India appear to rush its ethanol blending targets when countries like Brazil took decades?

• The first point that must be understood is that ethanol is not a new fuel. We did not invent ethanol. More than a century ago, Henry Ford designed the Model T to run on ethanol, and countries across the world, including Brazil and the United States, have used ethanol blends for decades.
• Equally important, India's ethanol blending programme did not begin under the present government. The initiative has a long institutional history and milestones (all are available in public domain—some are placed at Annexure-1)
• A pilot ethanol blending programme was launched in 2001, formally announced in 2004, and E5 (5% ethanol blending) was rolled out across several States by 2006.
• The policy framework was subsequently notified in the Gazette of India in January 2013 during the UPA government. These are matters of public record.
• India had set a target of achieving 5% ethanol blending across 10 States and Union Territories. Unfortunately, despite that ambition, blending remained stuck at around 1.5% until 2014.
• Nobody questioned ethanol as a fuel. That had already been settled globally. The real challenge was how India could produce sufficient quantities of ethanol.
• At that time, we depended almost entirely on sugarcane, a seasonal crop, with an annual ethanol production capacity of roughly 400 crore litres. Such production levels were inadequate even for modest blending targets.
• Recognising this constraint, the Government fundamentally changed its approach. With the launch of the National Policy on Biofuels in May 2018, the Government began creating the ecosystem necessary to produce ethanol at scale. This became a genuine whole-of-government mission.
• The Ministry of Petroleum & Natural Gas, Department of Food & Public Distribution, Ministry of Road Transport & Highways, Ministry of Heavy Industries, Indian Railways and several other ministries worked in close coordination to expand feedstocks, build infrastructure, support technology, align logistics, create demand certainty and encourage investment.

A landmark step came in August 2021, when India's Oil Marketing Companies IOCL, BPCL and HPCL issued Expressions of Interest for establishing Dedicated Ethanol Plants (DEPs) in ethanol-deficit regions.

These projects transformed the investment landscape because they offered:

• assured long-term purchase agreements by Oil Marketing Companies;
• tripartite financing arrangements with public sector banks through escrow mechanisms, substantially reducing investment risk;
• mandatory supply of ethanol exclusively for the Ethanol Blended Petrol Programme; and
• These plants naturally required nearly two years to come on stream. Capacity could not appear overnight.
• Another important milestone came in June 2021 when NITI Aayog published its comprehensive roadmap on ethanol blending after extensive consultation with automobile manufacturers, oil companies, agricultural experts and other stakeholders.
• The report highlighted not only the environmental and energy security benefits of ethanol but also the transformational impact on rural incomes and the agricultural economy.
• At that stage, India's requirement for 10% blending was ~500- 600 crore litres of ethanol annually. As fresh investments materialised and production capacity expanded, it became evident that the country would soon be capable of producing nearly 1,200 crore litres. Once the supply side had been secured, it became both logical and responsible to aspire for 20% blending.
• So, the suggestion that India "rushed" into ethanol blending is simply not borne out by facts.
• This has been a journey spanning over two decades from pilot projects in 2001, policy notification in 2013, institutional reforms after 2018, massive investments beginning in 2021, and then a carefully calibrated, phased increase in blending levels.
• All the stakeholders including automobile manufacturing companies, testing agencies, OMCs, DFPD etc were consulted before rollout.
• The progression has been deliberate:
  • Brazil took decades because it was building the world's first large-scale ethanol ecosystem.
  • India had the advantage of learning from global experience, adopting proven technologies, coordinating across ministries and creating a robust investment framework. We compressed the implementation timeline not by compromising science or safety but by improving governance, planning and execution.
  • That is the real story behind India's ethanol success is a carefully planned, staggered, gradual and stepwise transition and not a hasty or overnight decision.

Q) Why don't consumers have the choice of buying pure petrol, E10 or E20? And what about older vehicles that are labelled as only E10 compatible?

• When India decided to move towards higher ethanol blends, the automobile industry was involved at every stage. For E10 compatibility, manufacturers were consulted well in advance as early as 2020-21. India achieved its E10 target (10% ethanol blending in petrol) in June 2022, five months ahead of the date in ESY 2020-21.
• For E20, an even more rigorous process was followed. Extensive consultations were held with automobile manufacturers, component suppliers, testing agencies and research institutions. The roadmap of the IMC had been in the public domain from 2021 and laid out a calibrated path to reaching E-20.
• Every aspect was examined starting from material compatibility, engine calibration, fuel systems, drivability, durability, emissions and fuel efficiency.
• Before E20 was rolled out, the Government undertook several rounds of detailed consultations with all the stakeholders such as automobile manufacturers, technical experts, testing agencies and other stakeholders to ensure readiness across the ecosystem. Had automobile manufacturers not been fully satisfied with the results, they would never have stood behind the product or honoured vehicle warranties. The fact that virtually every manufacturer today is honoring warranty for all vehicles (old or new) is because they have been part of the consultation.
• Further, Maruti Suzuki serviced 2.84 crore vehicles during FY 2025-26, including 1.5 crore older, non-E20-certified vehicles, and reported no E20-linked corrosion, abnormal wear or component-life damage. Hero MotoCorp has reported similar field experience. This real-world evidence is far more reliable than isolated anecdotes.
• It is true that in some vehicles there may be a 3-5% reduction in fuel economy. But mileage is only one parameter.
• E20 offers a significantly higher-octane rating, superior anti-knock characteristics, faster combustion, better pickup, smoother acceleration and cleaner engine operation.
• It produces negligible particulate emissions and substantially reduces lifecycle carbon emissions by around 40%.
• In short, it is a cleaner, higher-quality and more efficient fuel than either E10 or pure petrol.
• So, the real question is this: if a cleaner, faster and less-polluting fuel is available, why would we deliberately choose an inferior alternative?
• The suggestion that every petrol pump should stock pure petrol, E10 and E20 simultaneously also ignores the realities of India's fuel distribution network.
• India operates over one lakh retail outlets, supported by an extensive network of refineries, terminals, depots and pipelines.
• Maintaining multiple grades of base petrol across this vast supply chain would create an enormous logistical challenge, increase handling costs, complicate inventory management and reduce operational efficiency.
• People often cite premium petrol as an example. That comparison is misplaced. Premium fuels are niche products sold in limited quantities at a significant price premium because specialised performance-enhancing additives are blended into them. They are not separate nationwide base fuel streams. Running parallel nationwide supply chains for pure petrol, E10 and E20 would be an entirely different proposition.
• There is another aspect that cannot be ignored.
• Over the past several years, public sector banks have financed nearly ₹1 lakh crore/yr of investments in ethanol production and associated infrastructure. Dedicated ethanol plants, distilleries, storage facilities and logistics networks have been created to meet India's blending targets.
• If, after creating this capacity, we were to arbitrarily revert to E10, what happens to these investments? What happens to the surplus production capacity? What happens to thousands of crores invested by farmers, cooperatives, entrepreneurs, financial institutions and public sector companies in good faith based on a national policy?
• Public policy must balance consumer interest with energy security, environmental sustainability, farmer welfare and prudent use of national resources.
• Would anyone today ask us to bring back the old blue DTC buses instead of modern public transport? Would anyone argue that we should return to pothole-ridden roads because they were familiar? Would Delhi replace cleaner transport fuels with more polluting alternatives?
• Progress means embracing better technology.
• E20 represents cleaner combustion, lower emissions, reduced crude oil imports, higher incomes for Indian farmers and greater energy security for the nation.
• Once a superior fuel has been scientifically validated, extensively tested and accepted by the automotive industry, the objective should be to move forward with confidence not to retreat to an inferior standard.

Q) If ethanol is blended with petrol, why isn't E20 cheaper than E10 or pure petrol?

• Today, the Government purchases ethanol at remunerative prices so that Indian farmers are fairly compensated. Take maize-based ethanol. We have progressively increased its procurement price and today it is around ₹71.86 per litre, even before GST, transportation, storage and depot handling costs.
• Therefore, if international crude oil is trading at around US$70 per barrel, E20 is actually costlier to produce than pure petrol.
• If crude rises to US$120–130 per barrel, the economics naturally reverse and ethanol becomes even cheaper.
• So, the question should not be, "Why isn't E20 cheaper?"
• The real question is, "How did India manage to protect consumers from the full impact of volatile global crude prices?"
• The answer is simple.
• Nearly 20% of every litre of petrol sold in India today is domestically produced ethanol. That ethanol is procured at around ₹71 per litre, a price that does not fluctuate every morning with Brent crude, geopolitical conflicts or shipping disruptions.
• In other words, one-fifth of your fuel tank is insulated from international oil volatility. That is one of the principal reasons India witnessed one of the most moderated increases in retail fuel prices despite unprecedented global disruptions.
• Ethanol blending is therefore not about making petrol cheaper on a particular day. It is about reducing India's exposure to imported crude oil.
• As a result, India recorded the lowest fuel price hike among major economies and its neighbouring countries over the past four years.
• India still stands out as the country as compared to other countries with lowest hike in fuel prices since the West Asia crisis started as can be seen through the table.

Every litre of ethanol blended means:

• less imported crude,
• less foreign exchange outflow,
• more income for Indian farmers,
• greater price stability for consumers, and
• stronger national energy security.

That is why the Ethanol Blended Petrol Programme (since ESY 14-15) has already:

• saved over ₹1.97 lakh crore in foreign exchange,
• substituted nearly 316 lakh metric tonnes of crude oil,
• reduced around 952 lakh metric tonnes of CO₂ emissions, and
• transferred more than ₹1.66 lakh crore directly into the hands of Indian farmers.
• Our farmers are no longer merely Annadatas; they have become Urjadaatas, contributing directly to India's energy security.

Q) There are concerns that E20 damages rubber components, affects engines in older vehicles, and many vehicle manuals specifically mention "E10 compatible". Should owners of older vehicles be worried?

• Unfortunately, as India's ethanol programme has grown, so has the misinformation surrounding it.
• Ever since India introduced E85, several lobbies with vested interests have attempted to create unnecessary fear. Every few months, a new rumour surfaces: rubber hoses will fail, engines will seize, fuel tanks will corrode. None of these claims stand the test of scientific evidence.
• Let us look at the facts.
• India's transition to E20 was not an overnight decision.
• Before the roadmap was finalized, the Government constituted expert committees involving automobile manufacturers, ARAI, SIAM, oil companies and technical institutions.
• In 2021, NITI Aayog published a comprehensive roadmap after extensive consultations with all stakeholders. That very roadmap also addressed the transition from E10 to E20 and the preparedness required from the automobile industry. Vehicle manufacturers were therefore fully aware of the policy direction years in advance.
• If manufacturers had not been involved, they would never have certified E20-compatible vehicles or honoured warranty obligations.
• E15+blends has now been in operation across India for over 3.5 years
• Before rollout of E20, it underwent extensive scientific testing, followed by extensive field validation covering engine durability, fuel systems, material compatibility, corrosion resistance, drivability, emissions and performance.
• But laboratory testing is only one part of the story.
• The biggest proof comes from the real world.
• Maruti Suzuki alone serviced nearly 2.5 crore vehicles, including around 1.5 crore older vehicles that were never originally certified as E20-compatible. If E20 were genuinely damaging rubber components, fuel lines or engines, we would have witnessed lakhs of warranty claims, widespread component failures and an avalanche of complaints across the country.
• That has simply not happened.
• Another concern relates to vehicle manuals carrying the words "E10 compatible."
• People must understand what those labels mean.
• A vehicle manual reflects the fuel specification prevailing at the time the vehicle was homologated and certified. It does not mean the vehicle suddenly becomes unsafe if fuel standards evolve later after extensive scientific testing, engineering validation and regulatory approval. If that logic were applied universally, no country would ever be able to upgrade its fuel standards.
• The transition from E10 to E20 was therefore based not on assumptions, but on years of testing, manufacturer consultations and field experience.
• India's ethanol supply chain is one of the most tightly regulated fuel supply systems in the country. Ethanol and blended petrol conform to strict BIS specifications and undergo quality checks at every stage from the distillery to the depot to the retail outlet.
• Any procedural lapse anywhere in the supply chain be dealt with firmly. Chief Secretaries of the States have been requested to ensure strict enforcement and take an iron hand against any instance of adulteration. There can be zero tolerance for lapses that compromise fuel quality.
• E20 is a safe, cleaner, proven and scientifically validated fuel that Indian consumers can use with confidence. Its quality, safety and compatibility have been validated and assured by all responsible stakeholders, including automobile manufacturers, testing and homologation agencies, Oil Marketing Companies, and regulatory authorities.
• Consumers are therefore advised not to be misled by misinformation, scaremongering or unverified content circulating on social media.