BT Explainer: Why E10 could make a comeback via premium fuel dispensers

The clamour for the comeback of E10, a fuel blend comprising 10% ethanol and 90% petrol, has grown ever since Chief Economic Adviser V Anantha Nageswaran suggested the government to bring back E10 for older vehicles.

With mounting pressure from consumers and taxi operators, the ministry of petroleum and natural gas is reportedly in talks with state-run oil marketing companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum to introduce E10 fuel via existing premium fuel dispensers.

E10, if it ever comes back, is unlikely to replace pure petrol because such fuel is often used for high-performance vehicles.

Thus, the only possible way for the government to bring back E10 is by using the existing fuel dispensing infrastructure of higher-octane fuels such as XP95, Speed, and Power95. Premium fuels are sold in relatively small volumes at a substantial price premium, owing to the specialised additives blended into them to enhance performance.

Replacing XP95, Speed, and Power95 with E10 also makes sense because the Research Octane Number (RON) of E20 petrol sold across India has risen to 95 from around 88 earlier.

The government could leverage the fuel dispensing infrastructure currently used for XP95, Speed, and Power 95 petrol to roll out E10 fuel. Before the E20 crisis blew up, industry executives were expecting this infrastructure to be utilised for flex fuel vehicles. Since there has been little progress in flex-fuel vehicle sales, this could be the easiest way out of the E20 quagmire.

Change of heart?

Recent reports of E10 making a comeback are contrary to the government’s official position of E20.

In a statement on July 10, the Ministry of Petroleum and Natural Gas had said that reverting to E10 would jeopardise investments of nearly ₹1 lakh crore per year in ethanol production and associated infrastructure financed by public sector banks.

Over the past several years, public sector banks have financed nearly ₹1 lakh crore per year of investments in ethanol production and associated infrastructure. Dedicated ethanol plants, distilleries, storage facilities, and logistics networks have been created to meet India's blending targets, the ministry had said.

The suggestion that every petrol pump should stock pure petrol, E10 and E20 simultaneously ignores the realities of India's fuel distribution network, the ministry had said on July 10.

India operates over one lakh retail outlets, supported by an extensive network of refineries, terminals, depots and pipelines. “Maintaining multiple grades of base petrol across this vast supply chain would create an enormous logistical challenge, increase handling costs, complicate inventory management and reduce operational efficiency,” it had said.

The government officially states that E20 was introduced to cut down the fuel import bill and boost farmers’ incomes. Over 30 crore cars and two-wheeler in India, manufactured before April 2023, are not compatible with E20.

Except Brazil where E30 is now mandatory, India is the only large nation with an E20 mandate. In the United States, E10 is the standard blend sold at gas stations. Japan’s average ethanol blend rate remained at 1.9% in 2025 even as it plans to introduce nationwide E10 blending by 2030. The average ethanol blend across most of the European Union stands at E10. In China and Russia, there are no such mandates.