Without ethanol, petrol could have hit ₹125/litre; no widespread engine failures from E20, says Gadkari
The ministry said India's retail petrol prices are market-determined and depend on international crude prices, exchange rates, taxes, freight, ethanol procurement costs and other operational expenses
- Jul 30, 2026,
- Updated Jul 30, 2026 3:13 PM IST
The Centre on Thursday mounted a strong defence of its E20 ethanol blending programme, telling Parliament that there is no verified evidence of widespread engine failures linked to E20 fuel despite more than 23 crore vehicles operating on higher ethanol blends across the country. The government also claimed that petrol prices could have touched ₹125 per litre during the recent West Asia crisis if ethanol blending had not reduced India's dependence on imported crude oil.
In a written statement tabled in the Lok Sabha, Road Transport and Highways Minister Nitin Gadkari said more than 20 crore two-wheelers and over 3 crore petrol cars have been operating on E15+ and E20 petrol for over two-and-a-half years without any verified evidence of widespread engine failure or vehicle breakdown attributable to ethanol blending.
The government said manufacturer service records also support the programme's safety. It cited data from a leading automobile manufacturer, which serviced 2.84 crore vehicles during FY26, including around 1.5 crore legacy vehicles, without finding E20-linked engine damage, abnormal corrosion or reduced component life. A leading two-wheeler manufacturer has also reported no higher incidence of damage in vehicles running on E20 fuel, the statement added.
Defending the economic benefits of ethanol blending, the government said the programme played a key role in shielding consumers from volatile global oil prices during the recent West Asia crisis. According to the ministry, although international crude prices rose sharply, domestic petrol prices increased only modestly due to calibrated government interventions and the growing use of domestically produced ethanol.
"During the peak of the West Asia crisis, the market price of petrol could have been around ₹125 per litre. However, Indian consumers continued to pay ₹94.77 per litre (ex-Delhi), also because public sector oil marketing companies could procure ethanol at around ₹70 per litre," the government said.
The ministry said India's retail petrol prices are market-determined and depend on international crude prices, exchange rates, taxes, freight, ethanol procurement costs and other operational expenses. It added that public sector oil marketing companies incurred an under-recovery of around ₹21,300 crore on petrol during February-March 2026, despite retail prices remaining below market-determined levels.
The government maintained that the E20 programme has been implemented through a phased and consultative process involving NITI Aayog, SIAM, ARAI, oil marketing companies, automobile manufacturers, ethanol producers and technical institutions. Laboratory studies and field trials, it said, have confirmed that E20 meets emission norms, does not adversely affect engine durability or material compatibility, and offers higher octane, improved anti-knock characteristics and cleaner combustion.
However, the Centre acknowledged that fuel efficiency in certain vehicles originally designed for E10 petrol may decline by around 2-6% when using E20 fuel. It said the actual impact on mileage depends on factors such as driving conditions, driving habits and vehicle maintenance.
Highlighting the broader impact of the Ethanol Blended Petrol Programme, the government said it has resulted in foreign exchange savings of about ₹1.98 lakh crore, substituted nearly 317 lakh metric tonnes of crude oil, reduced around 952 lakh metric tonnes of carbon dioxide emissions, and generated over ₹1.66 lakh crore in additional income for farmers.
The Centre on Thursday mounted a strong defence of its E20 ethanol blending programme, telling Parliament that there is no verified evidence of widespread engine failures linked to E20 fuel despite more than 23 crore vehicles operating on higher ethanol blends across the country. The government also claimed that petrol prices could have touched ₹125 per litre during the recent West Asia crisis if ethanol blending had not reduced India's dependence on imported crude oil.
In a written statement tabled in the Lok Sabha, Road Transport and Highways Minister Nitin Gadkari said more than 20 crore two-wheelers and over 3 crore petrol cars have been operating on E15+ and E20 petrol for over two-and-a-half years without any verified evidence of widespread engine failure or vehicle breakdown attributable to ethanol blending.
The government said manufacturer service records also support the programme's safety. It cited data from a leading automobile manufacturer, which serviced 2.84 crore vehicles during FY26, including around 1.5 crore legacy vehicles, without finding E20-linked engine damage, abnormal corrosion or reduced component life. A leading two-wheeler manufacturer has also reported no higher incidence of damage in vehicles running on E20 fuel, the statement added.
Defending the economic benefits of ethanol blending, the government said the programme played a key role in shielding consumers from volatile global oil prices during the recent West Asia crisis. According to the ministry, although international crude prices rose sharply, domestic petrol prices increased only modestly due to calibrated government interventions and the growing use of domestically produced ethanol.
"During the peak of the West Asia crisis, the market price of petrol could have been around ₹125 per litre. However, Indian consumers continued to pay ₹94.77 per litre (ex-Delhi), also because public sector oil marketing companies could procure ethanol at around ₹70 per litre," the government said.
The ministry said India's retail petrol prices are market-determined and depend on international crude prices, exchange rates, taxes, freight, ethanol procurement costs and other operational expenses. It added that public sector oil marketing companies incurred an under-recovery of around ₹21,300 crore on petrol during February-March 2026, despite retail prices remaining below market-determined levels.
The government maintained that the E20 programme has been implemented through a phased and consultative process involving NITI Aayog, SIAM, ARAI, oil marketing companies, automobile manufacturers, ethanol producers and technical institutions. Laboratory studies and field trials, it said, have confirmed that E20 meets emission norms, does not adversely affect engine durability or material compatibility, and offers higher octane, improved anti-knock characteristics and cleaner combustion.
However, the Centre acknowledged that fuel efficiency in certain vehicles originally designed for E10 petrol may decline by around 2-6% when using E20 fuel. It said the actual impact on mileage depends on factors such as driving conditions, driving habits and vehicle maintenance.
Highlighting the broader impact of the Ethanol Blended Petrol Programme, the government said it has resulted in foreign exchange savings of about ₹1.98 lakh crore, substituted nearly 317 lakh metric tonnes of crude oil, reduced around 952 lakh metric tonnes of carbon dioxide emissions, and generated over ₹1.66 lakh crore in additional income for farmers.