E85 fuel to be substantially cheaper than normal petrol: Hardeep Singh Puri

E85 fuel will be priced significantly below conventional petrol, creating a strong economic case for the adoption of flex-fuel vehicles in India, Petroleum and Natural Gas Minister Hardeep Singh Puri said on Wednesday.

Speaking at the launch of Hero MotoCorp's flex-fuel variants of the Splendor Plus and HF Deluxe motorcycles, Puri said affordable fuel pricing would be critical to driving consumer acceptance of the technology.

"Consumer economics is the most important factor," he said, adding that studies suggest owners of flex-fuel vehicles can achieve cost parity with conventional vehicles within a short period if E85 fuel remains cheaper than E20 and regular petrol.

The minister said E85 fuel, which contains up to 85% ethanol, will be made available at designated fuel retail outlets for vehicles certified to run on the blend. The move is expected to support India's efforts to reduce dependence on imported crude oil while creating additional demand for domestically produced ethanol.

India currently imports nearly 89% of its crude oil requirements, making the economy vulnerable to global energy price shocks and geopolitical disruptions. Puri noted that the country has already raised ethanol blending in petrol from 1.5% in 2014 to 20% today, resulting in foreign exchange savings of Rs 1.84 lakh crore through the substitution of 302 lakh metric tonnes of crude oil.

The launch of Hero's flex-fuel motorcycles marks one of the first major attempts to bring the technology into the mass-market two-wheeler segment. With Hero accounting for nearly 29% of India's two-wheeler sales, the minister said widespread adoption could have a significant impact on fuel consumption patterns.

Government estimates show that if flex-fuel vehicles account for just 1% of annual petrol vehicle sales, ethanol demand could rise by more than 4 crore litres a year, generating around Rs 266 crore in payments to distilleries, saving approximately Rs 195 crore in foreign exchange and reducing crude oil imports by about 0.28 lakh metric tonnes.

Puri said flex-fuel vehicles provide an immediately deployable pathway to reducing oil imports while supporting rural incomes through greater demand for agricultural feedstocks used in ethanol production. Hero's newly launched motorcycles can operate on ethanol blends ranging from E20 to E85, enabling consumers to switch to higher ethanol blends as fuel availability expands.

“India’s future mobility ecosystem will not rely on a single technology but will combine electric vehicles, biofuels, and hydrogen among others, in a manner suited to Indian realities,” said Puri.

Flex-fuel technology offers a practical near-term solution because it can be integrated into existing vehicle platforms and fuel infrastructure, he added.

The government is also evaluating policy measures, including fuel-price support and targeted incentives, to strengthen the economics of flex-fuel vehicles and accelerate their adoption.