Petrol Prices Would Have Soared Without Ethanol Blending: Government

The Ministry of Petroleum and Natural Gas defended the Ethanol Blended Petrol (EBP) Programme against criticisms regarding costs and food security, stating that retail prices of petrol in Delhi would have shot up to about ₹125 per litre during peaks of global crude oil if ethanol blending had not been introduced.

According to the ministry, the significant financial relief extended to citizens amid volatility in international markets has saved nearly ₹30 per litre at the pump. The value of ethanol blending is not just about being the cheapest fuel every day but also about protecting Indian consumers from extreme volatility in global oil markets and strengthening India's energy security.

The ministry highlighted that when the Indian crude basket reached approximately USD 135 per barrel, people consumed petrol priced at ₹94.77 per litre because 20% of each litre was domestically produced ethanol procured at stable prices insulated from the global market pass-through.

The EBP Programme has generated more than ₹1.97 lakh crore in savings as far as foreign exchange is concerned, substituting over 316 lakh metric tonnes of crude and reducing CO₂ emissions by more than 950 lakh metric tonnes. The ministry also dismissed claims that ethanol blending is sustained by taxpayer subsidies, stating it is 'India's energy insurance'.

The initiative has resulted in direct payments worth more than ₹1.66 lakh crore to farmers and distillers, creating a sustainable local market for agricultural products at the same time as reducing their 88% dependence on crude oil imports significantly.