New Delhi: On August 08, the Ministry of Petroleum & Natural Gas released a statement declaring its intent to blend 20% ethanol in petrol across India by the end of 2025. This announcement has sparked concern about the hurriedly implemented move, which was previously scheduled to be implemented by 2030.
Some motorists have complained that the fuel has reduced their vehicles’ mileage, and alleged that the fuel can damage their engines due to the higher ethanol blend. To allay concerns, the ministry issued a clarification, stating that the blended fuel, christened E20, would help lower carbon emissions by about 30% compared to the currently used E10 fuel.
Mileage depends on various factors beyond fuel type, including regular oil change, air filter cleaning, driving habits, tyre pressure and even air conditioning load. The currently used E10 fuel hasn’t had any impact on mileage, and most cars produced after 2009 are already capable of using E20 fuel.
Others have claimed that the cost benefits should be passed on to the customers. Ethanol was cheaper than petrol back in 2020, but increased procurement prices have made the ethanol weighted average price higher than that of petrol.
Despite this, the government is working with Oil Marketing Companies(OMCs) to blend maize-based and molasses-based ethanol with refined petrol. Citing the findings of a NITI Aayog study, the ministry says that molasses-based ethanol emit 65% lower greenhouse gases while maize-based ethanol offers 50% lower greenhouse gases than petrol.
This blending could help the OMCs save over Rs.1.44 lakh crore in foreign exchange, while helping cut CO2 emissions by 736 lakh tonnes, the equivalent of planting 30 crore trees.
India imports more than 85% of its crude oil, making it vulnerable to supply shocks or dollar volatility. This blend will offer a hedge to the government looking to blunt the impact of these risks.
OMCs spend more than 1.196 lakh crore buying ethanol from distilleries and more than Rs.1.18 lakh crore directly from farmers. This has given farmers another source of income, especially in states like Maharashtra, Uttar Pradesh and Karnataka, where most of the procurement takes place.
