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India has started rolling out E20 fuel—petrol blended with 20% ethanol—but that hasn’t been without its fair share of controversy, so much so that the Supreme Court is going to hear a public interest litigation in the matter on Monday. Here’s what it means for your car, mileage, fuel prices, and why the policy is facing controversy.
The government has been gradually rolling out E20 fuel since 2023(Reuters)
What is E20 fuel?
The idea behind E20 fuel—a mix of 80% petrol and 20% ethanol—is to cut oil imports, reduce carbon emissions, and support sugarcane farmers who are providing the ethanol for the blend.
The government has been gradually rolling out E20 fuel since 2023, when other blends like E5 and E10—seen as compatible with older cars—were also offered. However, these are now completely removed from nearly all of India’s 90,000 fuel stations.
Why is it controversial?
Only cars and two-wheelers manufactured after April 2023 are E20 compatible. Older vehicles, if they use E20 fuel, may suffer from engine knocking, corrosion, reduced fuel efficiency and degradation of rubber hoses and plastic pipes. That has automakers worried about warranty issues and higher costs.
Vehicle owners have complained about 6-8% lower fuel efficiency ever since they started using E20 fuel. Meaning, they will end up spending more per km, even if ethanol itself is cheaper.
E20 Fuel price in India
Ethanol itself is cheaper than petrol, which should make blended fuel more affordable. In practice, however, E20 is priced almost the same as regular petrol at pumps. For consumers, the bigger cost issue is lower mileage, not pump rates.
Does E20 fuel really impact mileage?
According to industry body Society of Indian Automobile Manufacturers, E20 does reduce mileage but it’s not a safety risk.
“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,” SIAM Executive Director PK Banerjee said at an event in New Delhi on Saturday (30 August 2025).
Claims of a 50% drop in mileage are unfounded and misinformed, Banerjee said. Scientific studies done in a controlled environment have shown a 2-4% decrease, but driving in real world conditions would result in higher drops in fuel 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,” CV Raman, executive committee member at Maruti Suzuki India Ltd., told Reuters.
Can India produce enough ethanol for E20?
India needs more than 1,000 crore litres of ethanol annually to achieve E20 fuel, but production capacity needs to catch up.
According to an ET report, by mid-2025 India’s annual ethanol capacity stood at 1,810 crore litres—a fourfold increase from 421 litres in 2013. During the Ethanol Supply Year 2023-24, about 707 crore litres of ethanol were blended into petrol—a blend rate of 14.6%. By May 2025, blended volumes had reached 548 crore litres—a blend rate of 18.74%.
Environmental impact of E20 fuel
While ethanol blending can reduce carbon dioxide emissions, experts say it increases some emissions like aldehydes. Moreover, large-scale sugarcane farming for ethanol worsens India’s water scarcity problem. Additionally, oil refiners need to build special storage for E20 fuel, which is an added cost altogether.
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