E20 Costlier Than Petrol at Current Oil Prices – Government
The Union government has acknowledged that E20 petrol is currently more expensive to produce than pure petrol at prevailing global crude oil prices. However, it maintained that ethanol blending supports India’s long-term energy security and reduces dependence on imported crude oil.
E20 Petrol Production Cost Explained
The Petroleum and Natural Gas Ministry said maize-based ethanol is procured at approximately ₹71.86 per litre before adding GST, transportation, storage and depot-handling expenses.
At an international crude oil price of around $70 per barrel, blending 20% ethanol with petrol makes E20 costlier to produce than unblended petrol. However, ethanol becomes more economical when crude prices increase to between $120 and $130 per barrel.
The government said domestic ethanol production protects part of India’s fuel supply from volatility in international oil markets.
E20 Petrol Mileage Impact Clarified
The ministry acknowledged that E20 petrol could reduce fuel efficiency by approximately 3% to 5% in some vehicles.
However, it said the fuel provides benefits such as a higher octane rating, improved anti-knock properties, cleaner combustion and lower lifecycle carbon emissions.
The government also rejected claims that E20 damages engines in compatible vehicles, stating that the fuel underwent extensive durability, corrosion, material compatibility and performance testing before nationwide implementation.
Ethanol Blending Reduces Crude Imports
India achieved its 20% ethanol-blending target during the 2025-26 ethanol supply year after gradually expanding the programme over more than two decades.
According to the government, ethanol blending has saved over ₹1.97 lakh crore in foreign exchange, replaced nearly 316 lakh metric tonnes of crude oil and reduced about 952 lakh metric tonnes of carbon emissions.
The programme has also transferred more than ₹1.66 lakh crore to farmers through ethanol procurement.
