While admitting that E20 blended fuel could result in a 3-5% reduction in the fuel economy of “some vehicles”, the government has also sought to explain why the blended fuel is not currently cheaper than pure petrol or fuel with lower ethanol levels.

The core reason, it said, was because the government is seeking to compensate farmers adequately, and so E20 fuel becomes relatively more expensive to produce than pure petrol whenever oil prices fall to around $70 a barrel.  

This statement on Friday (July 10, 2026), in the form of a frequently asked questions (FAQ) document by the Ministry of Petroleum and Natural Gas, comes at a time when critics are questioning why fuel with 20% ethanol is not cheaper than pure petrol or fuel with 10% ethanol.   

The document added that E20 fuel has a higher-octane rating and provides several other vehicular and emission-related advantages over unblended fuel. 

Automobile firms ‘forced’ to mislead people on E20 fuel: Kejriwal

Mileage hit but higher quality

“It is true that in some vehicles there may be a 3-5% reduction in fuel economy,” the Ministry said. “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%,” it added. “In short, it is a cleaner, higher-quality and more efficient fuel than either E10 or pure petrol.”

Why E20 isn’t cheaper

The government also sought to explain why E20 fuel is not cheaper than pure petrol or fuel that has lower ethanol levels. 

“Today, the Government purchases ethanol at remunerative prices so that Indian farmers are fairly compensated,” it said. “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 $70 per barrel, E20 is actually costlier to produce than pure petrol,” the government explained.

However, it added that the price advantage of ethanol kicks in when  $120–130 per barrel, the economics naturally reverse and ethanol becomes even cheaper. 

The fact that 20% of the fuel sold in India is ethanol has also insulated the Indian market against global oil price volatility, and allowed the Indian government to pass on much lower fuel price hikes than in comparable nations. 

Not a rushed rollout

Overall, the government also sought to assure the public that the decision to move to ethanol-blended fuel was not a “rushed” one.

“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,” the document said.

It added that all stakeholders, including automobile manufacturing companies, testing agencies, oil marketing companies, and the Department of Food and Public Distribution were consulted before rollout.

Amid raging concerns about petrol blended with ethanol corroding engine parts and resulting in considerable drop in mileage, the Petroleum Ministry in a detailed note, issued Thursday (July 2, 2026), refuted the assertions and emphasised that the process is backed by field trials. The overall programme adheres to best practices as observed from other countries, it added.

Notwithstanding the clarifications, social media continues to put forth concerns about the blended fuel.

Social media posts on the one-fifth ethanol blended petrol continue to state that it corrodes engines, drops mileage and until recently, sugarcane feedstock being directly mixed with petrol.

‘Ethanol blending backed by trials’

In the note issued on Thursday (July 2, 2026), the government held that the Automotive Research Institute of India (ARAI) along with the Indian Institute of Petroleum (Dehradun), the Society of Automobile Manufacturers (SIAM), and Indian Oil had undertaken studies to assess material compatibility and emission performance measurement with ethanol blending of 20% in 2014.

Petrol containing 20% ethanol blend was formally launched in February 2023. Ethanol blending of 19.99% was achieved in December 2025.

Referring to the trials, the Ministry said “no issues were reported in most parameters including drivability, startability, metal compatibility and plastic compatibility”.

It added that “only a marginal decline” was observed in cars running on ten-percent blended petrol compared to neat petrol.

“The extensive field trials included 40,000 kilometres for cars and 20,000 kilometres for two-wheelers, which did not show any significant negative effect,” the note read.

The Ministry reiterated ethanol’s “exceptionally high-octane number” made it a preferable fuel for high-performance internal combustion engines.

“Ethanol and ethanol-based fuels have historically been used in several sports cars because of their superior anti-knock characteristics, higher power potential and cooling effect arising from their high latent heat of vaporisation,” the note read.

The Ministry, referring to similar 10% blending in Japan, Canada and U.S. alongside 27% blending in Brazil, stated India’s blending programme was “consistent with international best practices rather than an experimental departure from them.”

It added the blending programme had helped substitute 310 lakh metric tonnes of crude oil, expedited payment of more than ₹1.6 lakh crore to farmers and helped save more than ₹1.9 lakh crore in foreign exchange.

Kejriwal to write to PM Modi

Further, Arvind Kerjiwal, chief of the Aam Aadmi Party (AAP), informed in a social media post that he would be writing to Prime Minister Narendra Modi on the issue.

Mr. Kejriwal accused the government of turning the country into an “experiment lab”. He also claimed that the government is forcibly imposing the blended fuel on people.

“Due to the ethanol-blended petrol, vehicles are breaking down, parts are getting damaged and mileage is dropping. People are very angry,” he wrote on social media, adding, “I am writing a letter to the Prime Minister. Public can either direct message or comment on what I must mention in my letter.”

Further, political commentator Tehseen Poonawalla on Thursday (July 2, 2026) called for a protest seeking to stop the government’s ethanol blending policy. In a social media post, he sought the government must “end this nonsensical mandatory ethanol twenty [percent] blending policy and give us, we the people, a choice of what fuel to choose.”

With a potential eye to popularise the uptake of biofuels in the country, the government late Wednesday exempted the levy of central excise duty on petrol blended with greater quantum of ethanol, that is 22% to 30%.

In other words, petrol blended with ethanol, at 22%, 25%, 27% and 30% would be exempt from central excise duties.

The Bureau of Indian Standards (BIS) had notified fuel standards for the blends May 19 this year. They are not presently available commercially.

“Following the achievement of 20% ethanol blending under the EBP Programme, the new standard aims to promote cleaner transportation, enhance energy security, reduce crude oil imports, and support the agriculture sector,” BIS had stated in their social media post.

The gazette notification comes days after India formally launched the E85 variant of petrol, that is 85% ethanol blended with 15% gasoline, on June 5.

E85 is about ₹20 per litre cheaper than the E20 variant of petrol, that is, the regular variant.