New Delhi: India’s 20per cent ethanol-blended petrol (E20) has saved more than ₹1.44 lakh crore in foreign exchange, cut carbon dioxide emissions equal to planting 30 crore trees, and paid farmers tens of thousands of crores in the past year alone, according to the petroleum ministry’s latest statement.
On August 4, the ministry issued a detailed response to concerns over E20’s impact on mileage, vehicle performance, and costs, saying fears were misplaced and backed its case with data and global comparisons.
The savings and the scale
Since Ethanol Supply Year 2014-15, public sector oil marketing companies have blended ethanol into petrol, replacing about 245 lakh metric tonnes of crude oil. The ministry says this has saved ₹1,44,087 crore in foreign exchange and reduced CO₂ emissions by 736 lakh metric tonnes — equivalent to planting 30 crore trees.
For 2025 alone, with 20per cent blending, payments to farmers are expected to be ₹40,000 crore, and forex savings around ₹43,000 crore.
Cleaner fuel, more farm income
A NITI Aayog study cited by the ministry shows ethanol from sugarcane emits 65per cent less greenhouse gases than petrol, while maize-based ethanol emits 50per cent less.The programme, the ministry says, has also cleared sugarcane arrears, boosted maize cultivation, and channelled crude import money to farmers — “Urjadaatas” as well as “Annadatas”.
The mileage question
Concerns about E20’s effect on fuel efficiency were flagged in 2020 and studied by an inter-ministerial panel of NITI Aayog, with research support from IOCL, ARAI and SIAM.The ministry says E20 delivers about 30per cent lower carbon emissions than E10, better acceleration in E20-tuned vehicles, and a higher octane number (~108.5 versus petrol’s 84.4), which is suited for high-compression engines.
On claims of “drastic” mileage loss, it points to other factors — driving habits, maintenance, tyre pressure and AC use. For some manufacturers, E20 compatibility dates back to 2009, and efficiency drops in E10 vehicles have been marginal.
Lessons from Brazil and older vehicles
Brazil runs on E27 fuel with no reported issues, including in cars from global automakers selling in India. E20 meets Indian and global safety and performance standards, the ministry says.For certain older vehicles, some rubber parts or gaskets may wear faster with E20, but these can be replaced during routine servicing — typically once in the vehicle’s lifetime.
Why E20 isn’t cheaper now
When NITI Aayog prepared its report in 2020-21, ethanol cost less than petrol. But procurement prices have since risen — the current average is ₹71.32 per litre, higher than refined petrol. Despite this, blending has continued because of its role in energy security, farm incomes and emissions cuts.
Insurance and the road ahead
The ministry called “totally baseless” the claim that E20 voids vehicle insurance, saying a social media post was misinterpreted. Insurance coverage, it stressed, is unaffected by E20 use.
The current roadmap keeps E20 in place till October 31, 2026. Moving beyond will require consultations with automakers, ethanol producers, oil companies and researchers, and a formal decision by the government.>
