Petrol Would Have Cost ₹125 Per Litre Without Ethanol Blending: Govt

The petroleum ministry has defended the government’s ethanol blending initiative, stating that the programme helped protect consumers from a steep increase in petrol prices during a period of high global crude oil prices.

According to the ministry, petrol prices in Delhi could have risen to Rs 125 per litre if oil companies had not blended ethanol into fuel when international crude prices reached $135 per barrel. Instead, consumers paid Rs 94.77 per litre as ethanol accounted for 20% of petrol under the E20 blending programme.

The government said E20 petrol helped reduce the impact of rising crude prices and provided savings of nearly Rs 30 per litre for consumers during the peak of the crisis.

The ministry also rejected claims that foodgrains meant for public distribution were being diverted for ethanol production. It clarified that subsidised rice from the Food Corporation of India (FCI) was not being used to support ethanol manufacturing.

Petrol and diesel prices remained unchanged for around 75 days after the West Asia conflict began on February 28, despite fluctuations in international crude markets. Fuel prices were later increased by Rs 7.5 per litre in May.

Currently, E20 petrol with 91-octane rating is priced at Rs 102.12 per litre in Delhi, while 100-octane petrol costs Rs 169 per litre.

Road Transport and Highways Minister Nitin Gadkari recently addressed concerns related to E20 fuel in Parliament. He said vehicle owners could experience a reduction in mileage and that some rubber components in older BS-III vehicles may need replacement. However, he reiterated that E20 petrol does not damage engines.

In a written response in the Lok Sabha, Gadkari cited a joint study conducted by the Automotive Research Association of India (ARAI), Society of Indian Automobile Manufacturers (SIAM) and Indian Oil Corporation Ltd (IOCL), which found that ethanol blending may lead to a marginal decline in fuel efficiency.

According to the study, E20 petrol could reduce mileage by 2% to 6%, depending on the vehicle type and age. However, the research also found that ethanol-blended fuel improves acceleration, ride quality and helps reduce carbon emissions by around 30%.

Gadkari added that older BS-III vehicles manufactured before 2016 may require replacement of certain rubber parts and gaskets when using E20 petrol. He maintained that the fuel does not significantly impact overall vehicle performance or require engine modifications.