The story so far:

Opposition leaders such as Rahul Gandhi and Arvind Kejriwal have launched campaigns against E20 saying it harms vehicles and that the government is forcing it on people. Mr. Kejriwal alleged that India has “yielded” to pressure from U.S. President Donald Trump to buy ethanol from the United States.

What is the current status of ethanol production?

The government’s target was to produce 10-11 billion litres of ethanol so that 20% of petrol used in transport vehicles could come from ethanol produced in India, with the money being funnelled into the Indian economy rather than becoming a foreign exchange outgo through crude oil imports. Taking advantage of the policy push, India’s distillery capacity has ramped up and is now capable of producing some 18-20 billion litres from some 500 distilleries. For this ethanol year, which runs November to October, the oil companies have contracted to procure some 10.5 billion litres of ethanol.

Will the ramp up lead to boost in agricultural produce imports from the U.S.?

There is no evidence of a surge in ethanol or maize (corn) imports in Ministry of Commerce statistics. In any case, direct ethanol import for petroleum blending is banned, though the U.S. corn lobby has been aggressively pushing for India to increase corn imports. Government figures for this ethanol year show that 45% of the ethanol for petrol blending will come from maize, FCI rice some 22%, sugarcane juice 16%, B-heavy molasses some 10%, damaged foodgrains around 4.5% and C-heavy molasses 1.1%. India’s maize output grew by 45% in three years to 55 million tonnes in 2025-26, with more than 20% of it going into ethanol, says Shankar Lal Jat of Indian Council of Maize Research, adding that there is no need to import it.

Sugarcane juice and B-heavy molasses go into sugar production and they are now being diverted to ethanol. The Indian Sugar Manufacturers’ Association reported that the closing stock of sugar in September of 2025 was around 5 million tonnes, and this year too, the closing stock is expected to be 5 million tonnes. This indicates the diversion to ethanol has not affected sugar availability or stocks. Yet, in the event of a monsoon failure, crop losses and foodgrain shortages, the diversion of FCI rice, sugarcane juice and B-heavy molasses to ethanol production will come under stress, raising the possibility of corn imports.

Should we be worried about using E20 in our vehicles?

If you bought your vehicle after April 2023, you can fill your petrol tank with E20, shut it and forget it because that’s when the Bharat Stage 6 Phase 2 (Real Driving Emissions) mandate took effect. Vehicles built after this deadline were factory-engineered for E20 — with ethanol-resistant elastomers, fluorinated fuel lines, upgraded pump seals and recalibrated engine control units. These roughly 70 million vehicles, about 23% of India’s active petrol fleet, face little cause for concern.

The remaining 77% — nearly 240 million legacy two-wheelers and cars built for E5 or E10 — are the genuine worry. Ethanol is a polar solvent that degrades older rubber compounds and plastics, hardening and cracking fuel hoses over time. It is also hygroscopic: it absorbs atmospheric moisture, and in vehicles left parked for extended periods, the ethanol-water mixture separates and settles, forming an acidic layer that corrodes tanks, damages fuel pumps and clogs filters with sludge. Consumer surveys by LocalCircles found 66% of pre-2023 owners reporting mileage losses exceeding 10%, and 55% reporting increased maintenance.

IIT Kanpur’s Engine Research Laboratory maintains that E20 causes no notable damage, with efficiency loss under 5% — attributing most complaints to driving habits and traffic conditions. But independent mechanics and automotive communities dispute this, citing real-world fuel pump and injector failures traced to ethanol’s solvent and low-lubricity properties.

The government told Parliament in August that one leading automobile manufacturer had serviced 2.84 crore vehicles in FY 2025-26, including about 1.5 crore legacy vehicles, without finding E20-linked engine damage. Another two-wheeler maker reported similar findings. On mileage, it said government and manufacturer studies showed an efficiency penalty of about 2 to 6% in some vehicles designed for E10, though this too was influenced by driving conditions, habits and maintenance.

A transparent and more phased rollout such as in Brazil, where the transition to high levels of ethanol along with modifications to vehicles happened over several decades in a stable manner, would have taken the people into confidence. In India, the 10% milestone was reached in 2022. Within three years, the blending was ramped up to 20% with very little information and advisories coming from manufacturers.

Has ethanol blending helped mitigate oil supply crisis?

In August, the government said in Lok Sabha that so far, the ethanol blending programme has led to saving of around ₹2 lakh crore of foreign exchange and substituting of some 32 million tonnes of crude oil imports. Substituting 10 billion litres of petrol with ethanol would mean dispensing with a month of crude imports. 

The government also told Parliament that while crude oil prices had gone up 70% during the war in West Asia, petrol prices at the pump had gone up by only 7 to 8% although under-recoveries had also increased. The OMCs procure ethanol at around ₹70 per litre for blending, compared with a pump price of around ₹105 per litre of petrol. The base price of petrol, which includes the cost of production, transportation and OMC margins, is typically 55-60% of the petrol pump price. On the surface, it appears that ethanol is not less costly than petrol but the issue is complex. Ethanol and petrol follow different costing and tax regimes, and it would be difficult to make an independent inference on whether ethanol has helped keep prices down, as the government claims.

Published – August 13, 2026 07:00 am IST

The story so far

In the face of continued criticism on social media, the government has once again come out with a detailed document addressing various concerns related to its ethanol blending programme, including the impact this would have on mileage, the advantages ethanol poses in terms of the environment and also in times of global turmoil, and why ethanol-blended petrol is currently not cheaper than pure petrol, even though oil prices had been falling until recently.

What are the government’s near-term plans for ethanol blending?

At the moment, the petrol sold in India is called E20, which means that for every litre of petrol, 20% of that is ethanol. The government has set its sights on taking this to E30 and has already notified quality parameters for E22, E25, E27, and E30 fuels and has announced central excise duty exemptions for these higher blends.

What are the concerns?

The last few years, and especially the last few months, have seen a wide range of criticism emerging about the use of ethanol. One segment of consumers says that the blended fuel has hit their cars’ mileage significantly, especially since most cars on the road today are tuned towards E10 fuel and not E20.

Another criticism is that the ethanol component has led to faster-than-usual corrosion of engine parts, leading to more frequent repair and replacement. Some users have even mentioned that the ethanol in the fuel has attracted insects that have swarmed around the opening of their petrol tanks.

Is it true that mileage will get hit?

It is, of course, difficult to verify the individual experiences of the vast number of motorists in India. But we can examine each of the claims one by one and see what the government and the auto companies have to say. The most important of these concerns is to do with mileage.

The government itself has admitted that mileage could be hit due to the use of ethanol-blended fuel. “It is true that in some vehicles there may be a 3-5% reduction in fuel economy,” the Ministry of Petroleum and Natural Gas said in a detailed frequently asked questions (FAQ) document issued on July 10.

The government does not specify if this 3-5% drop in mileage is compared to the previous E10 or to pure petrol. It also does not address whether this drop will become worse with higher blending percentages.

However, the maths shows the cost implications of this are not insignificant. Assume the average commuter drives a car that provides a mileage of 20 km per litre, and they have to commute 10 km for work one way. At the current price of petrol in Delhi of ₹102.12 per litre, this would cost them ₹51.06 per trip.

Assuming they have to go to the office and come back 20 days in a month, this works out to ₹2,042.4 per month. A 3-5% drop in mileage would mean this monthly bill would increase by ₹61-102 per month. This cost implication is, of course, only to do with the office commute — families use their vehicles for a wide range of other personal uses, including longer road trips.

In other words, the government is saying families should be prepared for a 3-5% increase in their fuel bill, which might or might not increase as the blending percentage increases.

Why is E20 not cheaper than pure petrol?

This is another criticism the government has sought to address over why E20 fuel is not cheaper than pure petrol, since it uses less crude oil in its production. The government in its FAQ said that it purchases ethanol at remunerative prices so that Indian farmers are fairly compensated. For maize-based ethanol, for example, it said that the procurement price was currently ₹71.86 per litre, not counting GST, transportation, storage and depot handling costs.

So, it explained, when international crude oil prices are at around $70 per barrel, E20 is actually costlier to produce than pure petrol. However, when the price of crude rises above $100 a barrel, as it did recently due to the war in West Asia, the situation reverses, and ethanol becomes cheaper.

In other words, higher levels of ethanol blending might result in a situation where fuel prices cannot be reduced for consumers even if the price of oil falls.

Will engine parts get corroded?

This complaint has been more vehemently opposed by the government and auto manufacturers. During a recent joint press briefing by auto manufacturers, Maruti Suzuki stated that vehicles designed for E10 have been tested with E20 fuel across all parameters, with no areas of concern. Other manufacturers, too, said that they had not seen any signs of E20-related corrosion in their cars.

What are the advantages of ethanol blending?

One key advantage of ethanol blending is a reduction in India’s oil imports, which are a source of significant expenditure and foreign exchange outflows. The government and auto manufacturers also say that E20 is a cleaner, higher-quality and more efficient fuel than either E10 or pure petrol.

They added that the loss in mileage is “more than compensated” by better acceleration, better anti-knocking and far less pollution in the case of ethanol against pure petrol.

Published – July 14, 2026 12:42 pm IST

Union Minister for Petroleum and Natural Gas Hardeep Singh Puri fills E85 fuel in a car during the during the launch of E85 fuel (a blend of 85% ethanol and 15% petrol) at an Indian Oil fuel station. File
| Photo Credit: ANI

“The government is actively examining a supportive policy framework to accelerate affordable adoption,” Minister of Petroleum and Natural Gas Hardeep Singh Puri said. File
| Photo Credit: The Hindu

The story so far: On September 9, the Centre instituted a ban on the export of broken rice. Additionally, it mandated an export duty of 20% on rice in husk (paddy or rough), husked (brown rice) and semi-milled or wholly-milled rice. The measures do not affect export of basmati or parboiled rice. The Secretary at the Department of Food and Public Distribution Sudhanshu Pandey stated that the measures would ensure adequate availability of broken rice for consumption by the domestic poultry industry and for other animal feedstock. Additionally, it would sustain production of ethanol that would further assist the successful implementation of the Union government’s Ethanol Blending Programme (EBP). However, the measures may affect countries dependent on Indian food exports in the face of a lost ‘breadbasket’ in Ukraine owing to the Russian conflict.

What does it have to do with inflation?

The lower the supply of a commodity, the higher would be the price of a product, which results in inflationary pressures. The adequacy of rice stocks in the country would ensure that markets do not experience excess demand and thus, trigger an abrupt price rise. For seven consecutive months, inflation has been above the Reserve Bank of India’s 6% tolerability threshold. The Consumer Price Index (CPI), or retail-based inflation, stood at 7% in August this year with rural and urban inflation scaling 7.15% and 6.72% respectively. This was furthered by an uptick of 7.62% in food prices during the same period.

The COVID-19 pandemic also had an impact on India’s previously held surplus. As a reaction to the distresses caused by the pandemic to the vulnerable sections the Union Cabinet had introduced a food security program, called the Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY) in March 2020. The scheme provisions an additional 5kg ration per person each month in addition to their normal quota of foodgrains under the National Food Security Act. In March, the scheme was extended for another six months until September 2022.

The Hindu Businessline had reported this week that foodgrain stocks (including rice, wheat and unmilled paddy) in the Food Corporation of India (FCI)’s central pool had dropped 33.5% on a year-over-year basis to 60.11 million tonnes as of September 1 — prompting doubts on the continuation of the scheme. Research analysts at Nomura observe that on the whole, though rice stocks should remain above buffer levels, the current export restrictions may not necessarily improve the demand-supply situation materially, implying, that there remains an upside risk to the price of rice. “As such, we believe there is a risk that further curbs on rice exports could be imposed, particularly in categories still exempted,” it states.

What happened to rice production?

The major rice cultivation season in India is the Kharif season, that entails sowing the crop during June-July and harvesting them in November-December.

It is imperative to note that rice is a water-intensive crop which also requires a hot and humid climate. Thus, it is best suited to regions which have high humidity, prolonged sunshine and an assured supply of water. It is for this reason that the eastern and southern regions of the country, with sustainable humidity and suitable mean temperatures are deemed favourable for the crop. While the two regions are able to grow paddy crops throughout the year, higher rainfall and temperature prompt the northern regions to grow only one crop of rice from May to November. Andhra Pradesh, Telangana, Punjab, Haryana, Chhattisgarh, Odisha, Madhya Pradesh, Tamil Nadu, Maharashtra, Uttar Pradesh and Bihar are among the rice producing States in India.

A perusal of Indian Meteorological Dept’s data, between June 1 and September 14 illustrate that Uttar Pradesh, Jharkhand, Punjab and Bihar have experienced deficient rainfall. The latter refers to rainfall being 20-59% below normal in a particular region. Although West Bengal, the country’s largest producer, has overall experienced a normal rainfall, its major productivity areas such as Nadia, Burdwan and Birbhum have had deficient rainfall. This indicates a potentially lower produce this year.

What are the concerns on ethanol blending?

Ethanol is an agro-based product, mainly produced from molasses, which is a by-product of the sugar industry. The EBP endeavours to blend ethanol with vehicular fuels as a means to combat the use of fossil fuels and in turn, rising pollution. As per the government, sugar-based feed stocks alone would not be able to meet its stipulated target of 20% ethanol blending by 2025.

In the 2018-19 Ethanol Supply Year (ESY), the government had allowed the FCI to sell surplus rice to ethanol plants for fuel production. The idea was to have in place an insurance scheme and an emergency provision for distillers.

However, in the ongoing ESY, because of supply constraints there has been an uptick in the procurement of rice from the FCI. The total ethanol produced from rice lifted from the FCI stood at 26.64 crore litres whereas that from damaged food grains outside the FCI purview stood at 16.36 crore litres. This means that the production accruing from FCI rice has increased 10-fold from the 2.2 crore litres used in a full ESY. At the same time, production from damaged foodgrains stands at half.

Thus, the export ban would endeavour to catch-up with this supply and additionally, unburden the FCI from provisioning to distillers.

What are the likely after-effects of the ban?

Geopolitical tensions between Russia and Ukraine have unsettled global food supply chains. With trade disrupted in the Black Sea region, Bloomberg reported in March that prices of rice are surging because traders are betting it will be an alternative for wheat which is becoming prohibitively expensive.

India accounted for 41% of the total rice exports in the world in 2021 larger than the next four exporters (Thailand, Vietnam, Pakistan and United States) combined.

As for broken rice, the United States Department of Agriculture (USDA) states that India accounted for more than half of the commodity’s global exports in the first half of 2022. As per government figures, between April and August this year, broken rice’s share in the overall rice export mix (of India) was 22.78% compared to 18.89% in FY 2021.

In descending order, China, Senegal, Vietnam, Djibouti and Indonesia are the biggest importers of India’s broken rice.

Senior Executive Director at the All-India Rice Exporters Association Vinod Kumaar Kaul told The Hindu, “Thailand, Vietnam and Pakistan would gain should we happen to lose this market. Once lost, regaining the market would be a task.”

Mr. Kaul pegs the losses to the exporters from the ban to be around ₹5,600 crore for the full year.

THE GIST

On September 9, the Centre instituted a ban on the export of broken rice. Additionally, it mandated an export duty of 20% on rice in husk (paddy or rough), husked (brown rice) and semi-milled or wholly-milled rice. 

In the ongoing Ethanol Supply Year, because of supply constraints there has been an uptick in the procurement of rice from the FCI. The export ban is a means to catch-up with this supply and additionally, unburden the FCI from provisioning to distillers.

With trade disrupted in the Black Sea region, prices of rice are surging because traders are betting it will be an alternative for wheat which is becoming prohibitively expensive. India accounted for 41% of the total rice exports in the world in 2021.