by

July 26, 2026

13 minutes

Read Time

Why is India’s ethanol-blended fuel policy facing consumer backlash?

Motorists have posted videos of stalled vehicles and lower mileage, but experts say ageing vehicle parts, poor maintenance and contaminated petrol could also be reasons for the problems.

New: You can now listen to articles.

This audio is generated by an AI tool.

Collin Furtado

Read a summary of this article on FAST.

Get bite-sized news via a new
cards interface. Give it a try.

Click here to return to FAST
Tap here to return to FAST

FAST

SINGAPORE: Earlier this month, Indian YouTuber Manish Kashyap posted a video in which he alleged that India’s new fuel blend – with increased ethanol – had caused his Toyota Innova multi-purpose vehicle to break down.

The automaker denied the allegations and pointed to fuel contamination. A criminal case has been registered against Kashyap with the Nagpur Cyber Police for allegedly spreading misinformation, local media reported.

The incident sparked a wave of similar claims by motorists on social media. Some displayed fuel drained from their tanks that had visibly separated layers and claimed that the blend had damaged their vehicles.

India’s decision to up the amount of ethanol in petrol to 20 per cent last year, and to make that fuel blend the standard choice for motorists since April has caused a furore in the country, transforming what was once a technical energy policy into a heated consumer controversy.

The government has promoted the fuel, called E20, to reduce its dependence on imported crude oil, increase farmers’ earnings and cut vehicle emissions. Ethanol is derived mainly from sugarcane and grains, which the country produces domestically.

The move, originally targeted for 2030, came five years ahead of schedule. Previously, the maximum amount of ethanol in petrol in the country was 10 per cent.

Guess Word
Crack the word, one row at a time

Buzzword
Create words using the given letters

Mini Sudoku
Tiny puzzle, mighty brain teaser

Mini Crossword
Small grid, big challenge

Word Search
Spot as many words as you can

Show Less

Supporters of Indian Youth Congress hold placards and shout slogans during a protest against government’s 20-per-cent ethanol-blended fuel policy, in New Delhi, India, Jul 10, 2026. (Photo: Reuters/Anushree Fadnavis)

The accelerated transition has triggered concerns over mileage losses, compatibility with older vehicles and the limited availability of pure petrol and E10 variants, motorists and mechanics told CNA.

One motorist from Pune, who requested anonymity, told CNA that his wife’s scooter repeatedly stalled and eventually would not restart. The service centre told him that E20 was aggravating an existing fuel-filter issue, he said.

Others reported lower mileage and anxiety over how E20 fuel could affect older vehicles.

“I am worried, definitely, because my car is almost 12 years old,” said Denzil Dmello, a 44-year-old IT services executive from Mumbai who owns a car and a scooter.

Gaurav Deshpande, a mechanic and car workshop owner in Thane, a city near Mumbai, told CNA he had seen cars stall. “Two vehicles came into my workshop with fuel-pump problems,” he added.

However, he said such failures could stem from contaminants entering fuel when stored at petrol stations, rather than from the E20 blend itself.

Experts agreed, but said India could ease the transition by improving fuel storage standards, preserving consumer choice and learning from countries that introduced higher ethanol blends gradually alongside compatible vehicles and multiple fuel options.

WHAT’S BEHIND INDIA’S E20 POLICY?

India advanced the rollout of a 20-per-cent ethanol blend to reduce its crude oil import bill and improve its energy security.

This came at a time when the United States and Israel’s war against Iran sent oil prices soaring.

An Indian man fills petrol in a two-wheeler at a fuel pump in Prayagraj, in the northern Indian state of Uttar Pradesh. (Photo: AP/Rajesh Kumar Singh)

India’s crude oil import bill increased by 60 per cent to US$49.8 billion in the April-to-June quarter of 2026 compared with the same period a year earlier, according to government data. The country is the world’s third-largest oil importer after China and the US.

The government estimated that the E20 policy would lead to foreign-exchange savings of 430 billion rupees (US$4.46 billion) and contribute 400 billion rupees (US$4.15 billion) to the earnings of domestic farmers during the year, according to 2025 data from India’s Ministry of Petroleum and Natural Gas.

In the 11 years until July 2025, India’s ethanol-blending programme saved more than 1.44 trillion rupees in foreign exchange, replaced about 24.5 million tonnes of crude oil and cut an estimated 73.6 million tonnes of carbon emissions – equivalent to planting 300 million trees – according to government data.

WHAT ARE THE CONCERNS?

Only about 20 per cent of new petrol vehicles sold in India in the last 15 years were E20-compliant, Thomson Reuters Foundation found last year in its analysis of government and industry data.

While vehicle manufacturers have introduced models with E20-compatible fuel systems since April 2023, more than 60 per cent of India’s vehicles on the road predate 2023, according to estimates based on Indian automobile industry data.

Mechanics and automobile experts told CNA the concerns largely centre around older vehicles.

Vehicles designed for lower ethanol blends could face faster wear of some fuel-system components and reduced performance with E20 fuel, they said, although some studies have pointed to a lack of evidence to back this up.

“People are worried about parts getting worn out. That is a possibility, but it takes a long time. The damage is limited to the fuel-delivery system – rubbers, seals, hoses and, in some cases, the fuel pump,” said Hormazd Sorabjee, an automobile expert and editor of Autocar India.

Sorabjee said older vehicles may face some problems over time because of E20 fuel, but would not suffer major or immediate damage that would cause sudden engine failure.

A study released on Jul 14 by researchers at the Indian Institute of Technology (IIT) Kanpur found no evidence that E20 damages the engines of either new or older vehicles.

“There has certainly been an increase in questions from customers, but that does not automatically mean there has been a corresponding increase in E20-related technical failures,” said Saharsh Damani, chief executive of the Federation of Automobile Dealers Association (FADA).

“We have also seen cases where initial claims blaming E20 were later found to have been caused by unrelated mechanical faults.”

He said several factors could be involved, including fuel quality, isolated adulteration, overdue maintenance, ageing components in older vehicles or entirely unrelated mechanical issues.

“Every case deserves a proper diagnostic evaluation before reaching a conclusion,” he added.

Moreover, parts in eight- to 10-year-old vehicles such as rubbers, seals and hoses that may be damaged by E20 fuel are “really very cheap”, Damani noted. “They come in hundreds of rupees, not even in thousands,” he said.

Sorabjee estimated that the cost of replacing those parts would be between about 25,000 rupees and 70,000 rupees over a 10-year period, depending on the car model.

A Bharat Petroleum oil container unloads petrol at a gas station. (Photo: AFP/Noah Seelam)

SO WHY IS THE BACKLASH GROWING?

Timing may partly explain the backlash.

Within months of the E20 rollout mandate, motorists began posting videos alleging fuel-related problems, just as the June monsoon increased the risk of water entering poorly maintained underground storage tanks in petrol stations.

Deshpande, the mechanic, said some bottled fuel samples that circulated on social media appear to contain far more liquid in the lower layer than could be accounted for by a 20-per-cent ethanol content. The samples could have been contaminated by water, he said.

“Many petrol stations have not converted to non-metal storage tanks and still have metal tanks underground. Ethanol is a kind of alcohol and attracts water. When there is metal around it, condensation can occur and draw moisture from outside into the tank,” Deshpande explained.

“What is happening right now has more to do with contamination of fuel than E20,” automobile expert Sorabjee agreed.

“Most of the complaints are coming from the north (of India). They are not coming from the west or the south, which suggests there is a contamination issue in the north. If E20 itself were the problem, cars across the country should be breaking down,” Sorabjee said.

Since ethanol tends to absorb moisture, stringent storage and handling methods are essential, experts said.

Ethanol also acts as a detergent, which can dislodge accumulated dirt in poorly maintained vehicle fuel tanks and send it into filters or fuel injectors, Sorabjee said. “Ethanol punishes bad practices.”

Social media has magnified isolated incidents, with some creators presenting speculation as technical evidence, Sorabjee added.

That said, E20 has established drawbacks. Ethanol contains less energy per litre than petrol, which translates into lower mileage, experts said.

Motorists and mechanics told CNA they had seen a 15 to 20 per cent drop in vehicle mileage.

“If my mileage was around 14 km per litre in peak traffic, it may have dropped to about 12 or 12.5 km per litre,” said motorist Dmello.

The motorist from Pune said he had seen a larger mileage drop of 30 per cent since switching to E20 fuel. “Earlier, on the highway, I used to get 24 to 25 km per litre. Now it has drastically reduced to 18 to 19 km per litre,” he said.

Autocar’s tests found losses ranging from 3.8 per cent to 12.6 per cent, depending on the vehicle and its engine calibration. Sorabjee said the decline could be higher in some older vehicles.

However, the IIT Kanpur study put the mileage loss caused by E20 fuel at less than 5 per cent.

Fuel economy also depends on traffic, tyre pressure, maintenance, driving style and vehicle age, making it difficult to attribute an individual motorist’s entire mileage decline to ethanol, experts said.

But a major point of contention is that the drop in mileage has not translated to lower fuel prices at the pump, experts and motorists said.

“Consumers are feeling the pinch, and at the end of the day the motorist is feeling shortchanged,” Sorabjee said. “They should have given a good price reduction on the E20 fuel.”

A worker fills a car with petrol at a fuel station in Kolkata. (Photo: Reuters/Rupak De Chowdhuri)

Retail petrol prices have increased by about 7 to 8 per cent in cities such as Mumbai and Delhi over the past year, according to government data. This followed four successive price increases in May, which took prices to their highest levels in the country in two years, according to Bloomberg.

Motorists and mechanics also complained about the lack of E10 and pure-petrol options at fuel stations.

“Give us a choice. Don’t push it down our throats,” said motorist Dmello.

He also highlighted the much higher prices of alternatives, which leave most motorists with little choice but to accept E20.

“Very few petrol pumps in India, or in Mumbai, give you the option of putting 100 or 95 per cent petrol. A few do have options, but the price difference is huge. If E20 fuel costs about 110 rupees in Mumbai, that would go up to 170 or 175 rupees,” Dmello said.

A report by NITI Aayog, the Indian government’s apex policy think tank, also recommended that higher-ethanol blends be priced lower than conventional petrol to compensate for lower fuel efficiency. It also proposed tax relief on E10 and E20 to offset the reduction in efficiency.

There are also costs associated with increased ethanol adoption. NITI Aayog noted that sugarcane, which is used to produce ethanol, requires large amounts of water: About 2,860 litres for each litre of ethanol.

Reports have also noted that oil firms are paying more for ethanol than the pre-tax cost of petrol.

LESSONS FROM BRAZIL AND OTHER MARKETS

Brazil is frequently cited by the Indian government as proof that high levels of ethanol blending in petrol can be successful.

On Jul 14, the Brazilian government increased the mandatory ethanol blend in petrol from 30 per cent to 32 per cent for 180 days, Reuters reported. The previous increase, from 27 per cent to 30 per cent, took place in August 2025.

But Brazil’s ethanol-blending journey bears little resemblance to India’s rapid switch from E10 to E20.

Drivers queue to pump fuel at a gas station in Brasilia, Brazil. (Photo: AFP/Evaristo Sa)

The Society of Indian Automobile Manufacturers (SIAM) has said Brazil’s transition to higher-ethanol blends was “spread over 30 or more years” and that “even today E0 fuel (pure petrol) is available to customers”, NITI Aayog’s report noted.

India should retain E10 as a protection-grade option for older vehicles, suggested SIAM.

Brazil’s transition was also supported by a large domestic ethanol industry, vehicles designed for multiple fuel blends and infrastructure that allowed motorists to choose between fuels according to price and availability, according to the report.

Other countries and regions that use ethanol in petrol include the US, the European Union (EU), Indonesia, Paraguay, Bolivia, Zimbabwe, Thailand and the Philippines.

Most petrol sold in the US contains 10 per cent ethanol, according to the US Energy Information Administration.

In April, European Commission president Ursula von der Leyen reportedly said the commission would consider allowing higher ethanol blending in petrol and a possible move to E20. E10 fuel is currently widely available across the EU.

Indonesia began rolling out a programme this month for petrol to be blended with 5 per cent ethanol, and said it was looking to move to E20 by 2028, according to local media reports.

Paraguay has mandated an E30 blend, while Thailand offers subsidised E20 and E85 fuel.

The Philippines currently has E10 petrol and plans to sell E20 fuel, according to an Economic Times report.

However, all these markets offer a choice of petrol blends at most fuel stations, experts said.

They said Brazil-style higher blends would require India to shift towards specially engineered flex-fuel vehicles, with careful testing and a multi-year transition to protect the country’s large fleet of older vehicles.

They added that the success of India’s transition to fuels with higher blends than E20 would depend on maintaining consumer trust.

“What is important is that the transition remains evidence-based, transparent and customer-centric … The priority now is continued consumer awareness and proper vehicle maintenance,” FADA’s Saharsh said.