India's Ethanol Blending Programme Saved Consumers Nearly ₹30 Per Litre During Oil Price Crisis

The Indian government claims that ethanol blending has saved consumers nearly ₹30 per litre during the peak of the global oil price crisis, which saw crude oil prices touch around US$135 per barrel. This is according to a statement made by the government in response to criticism over food grain diversion and pricing under the Ethanol Blended Petrol (EBP) Programme.

Without ethanol blending, petrol prices in Delhi would have risen to around ₹125 per litre during this period, as 20% of every litre comprised domestically produced ethanol procured at pre-agreed prices. The government maintains that no food grain is diverted for ethanol production before meeting requirements under the Public Distribution System, the National Food Security Act, welfare schemes and mandatory buffer stock norms.

Only surplus stocks certified by the Department of Food and Public Distribution are approved for ethanol production. Damaged grain, broken rice, and food grain unfit for human consumption are also used under the programme. The government is expanding second-generation ethanol production from agricultural residues under the Pradhan Mantri JI-VAN Yojana to reduce dependence on food grains.