Hidden challenge of E20 petrol: Why storing it is far more complicated than ordinary fuel

Bhutan's decision to turn down India's offer of E20 petrol has put the spotlight on a part of the clean-fuel transition: storage. The Himalayan nation's concern wasn't about using ethanol-blended fuel on the road — it was about keeping it stable before it is poured into the fuel tanks of a vehicle.

Unlike conventional petrol, ethanol-blended fuel demands stricter handling because even small amounts of moisture can alter its composition. As countries embrace higher ethanol blends, the ability to store and transport the fuel safely is becoming just as important as producing it. 

Why ethanol behaves differently 

The biggest reason lies in a simple scientific property: ethanol is hygroscopic. 

This means ethanol naturally attracts and absorbs water from the surrounding environment. Even small amounts of moisture entering storage tanks through vents, condensation or leaks can gradually dissolve into the fuel. 

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Pure petrol does not readily absorb water. Ethanol, however, mixes completely with it. 

As long as the water content remains low, the blend remains stable. But once moisture exceeds a critical limit, the fuel can undergo what engineers call phase separation. 

What is phase separation? 

Phase separation is one of the biggest concerns with ethanol-blended fuel. 

When enough water accumulates: 

• Ethanol bonds with the absorbed water. 
• The ethanol-water mixture separates from the petrol. 
• The heavier ethanol-water layer settles at the bottom of the storage tank. 
• The petrol floating above is left with less ethanol than intended. 

This creates two major problems. 

Vehicles drawing fuel from the bottom of the tank may receive a water-rich ethanol mixture that can cause poor combustion, hard starting, corrosion or even engine damage. Meanwhile, the petrol remaining above no longer contains the intended ethanol concentration and may fail to meet fuel quality standards.

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Once phase separation occurs, the fuel usually cannot be restored simply by mixing it again. 

Corrosion becomes a bigger concern 

Water inside storage tanks does more than dilute fuel. It accelerates corrosion in steel tanks, pipelines and dispensing equipment. 

Older fuel infrastructure designed for conventional petrol may also contain seals, rubber hoses and gaskets that are not compatible with higher ethanol blends. Over time, ethanol can degrade these materials, increasing the risk of leaks and equipment failure. 

For this reason, modern storage facilities increasingly rely on stainless steel, aluminium and ethanol-resistant polymers. 

Condensation: the invisible threat 

Water contamination doesn't always come from leaks. Daily temperature fluctuations cause warm air inside storage tanks to cool, forming condensation. Over time, these tiny droplets accumulate at the bottom of tanks. 

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In humid regions or mountainous terrain where moisture levels remain high, preventing condensation becomes an essential part of fuel management. 

How ethanol-blended fuel is stored safely 

Fuel companies follow a range of precautions to maintain fuel quality: 

• Storage tanks are kept tightly sealed to minimise moisture ingress. 
• Tanks are inspected regularly for water accumulation. 
• Water-detection paste and electronic monitoring systems are used to identify contamination early. 
• Tanks are cleaned periodically to remove sludge and sediments. 
• Seals, hoses and fittings are replaced with ethanol-compatible materials. 
• Fuel quality is tested before distribution. 
• Inventory turnover is kept high so fuel is not stored for extended periods. 

Modern fuel depots are also designed to minimise temperature fluctuations and reduce the amount of humid air entering storage tanks. 

Why geography matters

Maintaining fuel quality does not end at the storage terminal. Tanker trucks, railway wagons and pipelines must all remain dry and free from contamination. Before loading ethanol-blended petrol, operators ensure that tanks contain no residual water from previous cargoes or cleaning operations. 

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Even a small amount of contamination can compromise an entire shipment. The challenges become greater in regions with high humidity, heavy rainfall or difficult terrain. 

Mountainous areas may face additional risks from groundwater seepage, inaccessible storage facilities and maintenance constraints. These factors increase the likelihood of moisture entering storage systems, making ethanol blends more difficult to manage than conventional petrol.