Ethanol Blending Saves Consumers Nearly Rs 30/Litre Amid Global Crude Price Spike

The Indian government has defended its ethanol blending program, citing its role in stabilizing fuel prices during the recent global crude price spike. According to the petroleum ministry, without the ethanol blend, petrol in Delhi would have cost around Rs 125 a litre when global crude prices touched $135 a barrel.

The ministry pointed out that consumers paid Rs 94.77 per litre instead of the expected price due to the ethanol blending, which made up 20% of every litre and helped insulate retail prices from the crude spike.

The government has denied allegations that foodgrain meant for the poor was being diverted for ethanol production or that subsidised FCI rice was being used to support the program. It also clarified that lab studies and real-world data have shown no adverse impact on vehicle performance from E20 fuel, with over 23 crore two-wheelers and 3 crore-plus petrol cars having run on these blends without verified evidence of engine failure linked to ethanol blending.

The petroleum ministry has stated that the Ethanol Blended Petrol programme was rolled out through a phased, scientifically validated process, with blending levels raised gradually as production capacity and infrastructure were built up. The oil ministry had earlier told the Rajya Sabha that the reduction in fuel efficiency for BS-III, BS-IV and BS-VI vehicles designed for E10 fuel may see efficiency drop by 2-6% depending on vehicle category and age when run on E20.