Govt discussing E21 fuel rollout by 2027, may cap ethanol blending at E25

Amid Prime Minister Narendra Modi’s repeated calls for conservation and responsible fuel use, the government is internally discussing the next phase of ethanol blending in petrol as part of a broader energy security strategy, sources told Business Today.

According to sources, the Centre is evaluating a roadmap for the rollout of E21 blended petrol by 2027, while E25 blending could be targeted by 2029.

Sources also indicated that the government may cap ethanol blending in petrol at 25 per cent.

“The transition towards higher ethanol blending will happen in a calibrated and phased manner so that the automobile industry gets adequate time to prepare engines, supply chains and infrastructure accordingly,” a source aware of the discussions said.

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Another source said the government is conscious of concerns around vehicle compatibility and mileage efficiency. “The idea is not to disrupt the ecosystem suddenly. The transition will be gradual and aligned with industry readiness,” the source added.

The discussions come at a time when India is trying to reduce its dependence on crude oil imports amid volatile global energy prices and rising geopolitical uncertainty.

PM Modi has, in recent days, repeatedly stressed the need for energy conservation, avoiding unnecessary travel and responsible consumption, signalling a broader push towards fuel savings and import reduction.

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According to estimates, achieving 20 per cent ethanol blending has helped India save nearly 4.5 crore barrels of crude oil annually while reducing foreign exchange outflow by around Rs 1.5 lakh crore.

India had earlier accelerated its ethanol blending programme and achieved the rollout of E20 petrol ahead of earlier timelines. The next phase of blending, however, is expected to be more calibrated due to concerns around engine compatibility, mileage efficiency and infrastructure readiness.