India has started selling E20 fuel, a blend of 80% petrol and 20% ethanol, at fuel stations nationwide. The rollout began in 2023. The government aims to reduce oil imports, lower carbon emissions, and support sugarcane farmers supplying ethanol. The Supreme Court will hear a public interest litigation on Monday over concerns about the fuel’s impact on older vehicles.
E20 is compatible only with cars and two-wheelers manufactured after April 2023. Older vehicles using it risk engine knocking, corrosion, and damage to rubber hoses and plastic pipes. Automakers have warned that this could increase repair costs and complicate warranties. Vehicle owners have reported fuel efficiency drops of 6% to 8%, which increases running costs even though ethanol itself is cheaper than petrol.
Despite this, E20 is sold at the same price as regular petrol.
Why E20 is Same Price as Petrol in India?
The Oil Ministry said rising ethanol costs are the main reason. Ethanol prices have increased and, in some cases, now exceed petrol costs. Adding ethanol to petrol also raises blending and logistics expenses, which contribute to higher production costs.
An official from the Ministry of Petroleum told Reuters, “The rising cost of ethanol and additional handling costs have made E20 pricing comparable to petrol. The government has not mandated a lower price for E20 at fuel stations.”
Automakers note that E20 has slightly lower energy content than petrol. This reduces mileage by 2% to 6% in normal driving conditions. PK Banerjee, Executive Director of the Society of Indian Automobile Manufacturers, said in New Delhi on August 30, 2025, “Millions of vehicles are plying on E20 for quite some time now. Not a single vehicle breakdown has been reported or vehicle failure has been reported.”
CV Raman, executive committee member at Maruti Suzuki India Ltd., added, “On road, it could be very different because of the way in which the vehicles are maintained and driven, so that difference will be there.”
Environmental Impact of E20 Fuel
Ethanol blending reduces carbon dioxide emissions but can increase other pollutants, such as aldehydes. Large-scale sugarcane farming for ethanol strains India’s limited water resources. Oil refiners face additional costs to store and transport E20 safely. These factors raise overall production expenses, which also affect fuel pricing.
India’s ethanol production has expanded in recent years. By mid-2025, annual capacity reached 1,810 crore litres, up from 421 crore litres in 2013. During the 2023-24 Ethanol Supply Year, around 707 crore litres were blended into petrol, achieving a 14.6% blend rate. By May 2025, blended volumes reached 548 crore litres, or 18.74% of total petrol consumption. Production still needs to increase to meet full E20 demand, which requires over 1,000 crore litres annually.
Consumers have raised concerns about price and fuel efficiency. Ramesh Kumar, a driver in Coimbatore, Tamil Nadu, said, “My mileage for the same route, similar traffic, and driving style has gone down by at least 1-1.5 km per litre in the past few months. Yet E20 costs the same as regular petrol.”
Does E20 Fuel Really Impact Mileage?
Industry experts say E20 reduces mileage but does not pose a safety risk. PK Banerjee said, “Claims of a 50% drop in mileage are unfounded and misinformed. Scientific studies in controlled environments show a 2-4% decrease, but real-world driving may result in slightly higher drops.”
CV Raman of Maruti Suzuki emphasized that driver habits and vehicle maintenance affect efficiency. “On road, it could be very different because of the way in which the vehicles are maintained and driven, so that difference will be there,” he said.
The Supreme Court hearing will address concerns about older vehicles, fuel pricing, and environmental effects. Officials and automakers stress that only certified vehicles should use E20. The government maintains that E20 is a step toward energy security and reducing reliance on crude oil.
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