Bring back E10 petrol for older vehicles: CEA V Anantha Nageswaran

The government should bring back E10 blend, not because E20 petrol is wrecking engines but because E10 would calm down the public panic while ensuring that the existing fleet could be upgraded in the due time, argued Chief Economic Advisor, V Anantha Nageswaran in an opinion piece for The Indian Express. The opinion piece was co-authored with Akash Poojari, consultant with the Department of Economic Affairs.

Nageswaran acknowledged that there is a growing complaint about E20 petrol damaging engines but added that that the assumption is incorrect. “Start with the engine, and the evidence does not support the fear of damage. Ethanol carries about two-thirds the energy of petrol, so a litre of E20 takes you a little less far, but the loss is small and does not signal any malfunction. Ethanol is only a fifth of the blend, so the energy penalty is around 6 to 7 per cent, not the 30 per cent doing the rounds,” he said.

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The CEA said there are benefits of using ethanol-blended petrol, and is also good for the environment. Tests from the US as well as India show that the claim of engine damage does not hold up.

Nageswaran and Poojari pointed out that there is, however, another problem. India has roughly 75-80 million older two-wheelers built before BS4 that run on carburettors. “A carburettor cannot sense the extra oxygen in the blend and adjust for it, so on E20, the engine draws in too little fuel for the air it draws in and runs hot. Further, older rubber seals that are not rated for ethanol are a separate problem, as they degrade on contact with the fuel regardless of engine temperature. Retrofitting those seals with ethanol-compatible ones is cheap. Still, it happens one vehicle at a time, and covering 75 to 80 million two-wheelers that way will take years, even if every workshop starts today,” they argued.

The original roadmap had requested a lower-blend fuel, but that fuel – E10 – has quietly vanished from the pumps. “Restoring a lower blend at the pumps, say, E10, alongside the option to buy E20, would calm most public concern, lower total ethanol use instead of raising it, and protect the existing fleet while the retrofit programme catches up,” they said.

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They also presented another question – how much further should blending go?

“Moving from E20 to E27 or E30 is a different decision altogether, because that is where fuel begins to crowd out food,” they said. India is trying to shrink the two big import bills – crude oil and edible oil.

They said that blending E20 would come entirely from grain, and it is unclear if grain ethanol is cleaner than the alternatives once cultivation and processing are counted.

“That is not to say that the ethanol programme has not delivered material gains. It has cleared sugarcane dues, lifted rural incomes and built an assured market. On the flip side, holding at E20 also carries its own costs. These include distillery capacity built for more, loans taken against expected demand, and a sugar surplus that ethanol helps absorb. These belong in the reckoning too, and like most public policy dilemmas, the honest course of action is to weigh both sides carefully,” they wrote.

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“Bring back a lower blend, such as E10, for the older fleet of vehicles. Fix the price and water distortions that unintentionally favour maize over other crops, relook at the import duty on edible oil to support the push towards domestic self-sufficiency, and hold at E20 until India has thoroughly costed the food-versus-fuel trade-off, rather than assuming it away,” they added.