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
