Worried About E20? What It Means for Your Car and the Climate
22 Aug 2025 6:35 AM IST
Description: India is an energy-insecure country. Last year, the country imported 87.7% of the crude oil it consumed. To change that, the government introduced blended petrol in 2018. At first, it was petrol with 10% ethanol. By the end of 2025, the government will roll out petrol with 20% ethanol. In fact, in July, the Road Ministry published draft norms and sought feedback on allowing manufacturers to make 100% ethanol-fueled vehicles.
But, auto-owners say they feel shortchanged. They’ve noticed that their vehicles are giving them a lower mileage since the government introduced blended petrol. They’re also worried about ethanol corroding the insides of their bikes and cars.
In the latest episode of The Signal Daily, we’ll hear from Indian consumers as well as automotive and biofuel experts. Why are consumers upset at this policy? What do they want instead?
The Core produces The Signal Daily. Follow us wherever you get your favourite podcasts. To check out the rest of our work, go to www.thecore.in.
NOTE: A machine transcribed this episode. A human has looked at this text but there might still be errors. Please refer to the audio above, if you need to clarify something. If you want to give us feedback, please write to us at [email protected].
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TRANSCRIPT
Kudrat (Host): Saurabh recently visited a petrol pump to fill fuel in his Nissan Magnite. Since the government introduced blended petrol – for now, that means petrol with 10, 15 or 20% percent of ethanol – he said that he has noticed a 25% drop in his mileage. So, he decided to investigate.
Saurabh: I even asked one guy yesterday, yesterday, only I asked that, is it E 10 or E 20, at the Indian Oil petrol pump. He told, he told what? Like he didn't even know. Um, uh, knew that this is E 10 or E 20. What is E 10? What is E20?
Kudrat (Host): Saurabh is in multiple Reddit groups – r/carsindia and r/Indianbikes. In them, he and his fellow redditors share their frustration at the Indian government’s policy of introducing blended petrol. He said that they’ve all noticed a significant drop in the mileage of their vehicles. But, most of all they’re concerned about how ethanol could corrode their cars and bikes from the inside.
In early August, the Ministry of Petroleum and Natural Gas posted a clarification on their X account. They said that it’s a misconception that blended petrol reduces mileage by a significant amount. They agreed that while it can damage some parts of vehicles, replacing those parts is inexpensive, and consumers can do so during regular servicing. But, consumers didn’t buy this – more on that later.
Kudrat (Host): I’m your host Kudrat Wadhwa and you’re listening to The Signal Daily. We don’t do hot takes. Instead, we bring you deep dives into the how and why of consumer trends.
In this episode, we’ll learn about why consumers are upset about the government’s decision to introduce blended petrol. As the govt gradually increases the percentage of ethanol in petrol, as it has publicly said it’s going to, what do consumers want instead?
Kudrat (Host): India is an energy-insecure country. In 2023-24, the nation imported 23.25 crore tonnes of crude oil. That’s the equivalent of 87.7% of the total crude oil India used that year. Similarly, though India is the world’s second largest coal producer, the country imported 21% of the coal it consumed in 2023-24. That’s because India does not produce higher-grade coking coal, which is what goes into producing steel.
India’s history has several moments when energy insecurity caused political, economic, and social disruptions, like the OPEC embargo of 1973, or the 1991 Gulf War. Forget history, we’re seeing one such disruption play out right now. US President Trump wants India to stop buying Russian oil, which India is refusing to do, in part because it is reliant on cheap Russian oil. And that’s despite the fact that Trump has even imposed a steep duty of 50% on Indian exports to the US.
To make India more self-reliant in energy, the Indian government proposed the National Policy on Biofuels in 2018. Per this policy, oil companies will sell petrol blended with ethanol. At first, consumers saw E10 fuel in the market – that’s petrol with 10% ethanol. Though the government targeted rolling out E20 by 2030, it’s ahead of schedule. E20 petrol will be available across the nation by the end of 2025. Eventually, the government wants to keep increasing the percentage of ethanol in fuel – in a recent press conference, Petroleum Minister Hardeep Singh Puri said that India will gradually scale toward E25, E27 and even E30 fuel.
Kudrat (Host): Ethanol companies make it from the byproducts of crops like sugarcane and maize. So, in addition to contributing to energy security, the government says that this biofuel also helps India’s farmers make more revenue.
In fact, on August 12th, the Ministry of Petroleum and Natural Gas put out a statement saying that the E20 fuel will help Indian farmers earn 40,000 crore rupees in 2025 and will help India save Rs 43,000 crores in foreign exchange currency.
Moreover, it is also better for the environment since it has lower greenhouse gas emissions.
The Signal Daily reached out to Abhishek Jha to learn more. Abhishek currently works at UrjaNovaC, a climate tech company. He has worked in the energy sector for a decade and a half and he specialises in biofuels.
Abhishek Jha: So we also want to be, uh, because we are now committed to reaching net zero by 2070, so we want to be, uh, looking for alternate ways of producing energy, likes of renewables, and that is where biofuels come into picture.
And then, uh, there is another angle that is very important is, from the farmer's perspective that mostly what we have seen our farmers are producing, uh, fruits that is for, that is for our daily, daily consumption purpose. But then there is another way of doing farming where you have more cash crops.
Which is not only for direct consumption, but for energy and other uses, and which is much more, uh, uh, I would say profitable from the revenue point of view for the farmers. So that is another angle that government is looking at.
So what they're trying to do is, one, uh, increase income for farmers. Two, reduce dependence on, uh, fossil fuels. Third, uh, reduce, uh, I mean in terms of the GG emission by using biofuel.
So that is where ethanol as an alternate comes into picture and uh, government is quite bullish on it.
Kudrat (Host): Introducing ethanol is great on paper – it benefits the environment and even helps the country’s farmers earn more revenue. But, there’s a fine print here. Consumers say that they’re seeing higher costs, lower mileage and are concerned about potential engine damage. Their concerns aren’t totally unscientific either.
For starters, ethanol has 2/3rds of the energy that petrol has. Specifically, while a litre of petrol has 34.2 megajoules of energy, a liter of ethanol has about 21.1 megajoules of energy.
Abhishek Jha: Now, in that case, when I use a blended fuel that is 20% ethanol, I am consuming, net amount of fuel is higher, roughly about 7%.
So what's happening is that, uh, though the claim is that your dependence has reduced as 20% because I have blended 20% and all, but in actual, it is not 20. It is, uh, lesser than 20, maybe 15%. That is from the substitution perspective, but the larger angle where the people are a little more unhappy is because in a way you are charging more from me. Because now I'm consuming more petrol because of this blending.
So that is the largest or biggest concern people are having, that this is, uh, another way of charging people more than what the government is claiming to do.
Kudrat (Host): The consumers The Signal Daily spoke to said the same thing – that they are using more fuel to cover the same distance. A recent survey by LocalCircles, a social media platform to increase citizen engagement with governance, found similar results. LocalCircles said that they received over 36,000 responses from petrol vehicle owners. Of them, two-thirds opposed the E20 mandate. 11% of respondents who bought their vehicle in 2022 or before said that they saw an over 20% loss in mileage in 2025; 22% said they saw between a 10-20% loss.
The government argues that these accusations are baseless. In its statement from early August, the Ministry of Petroleum and Natural Gas said that at most, the reduction in mileage that consumers with non-E20 compliant vehicles will see is just 1-6%.
But, consumers say their lived experience says otherwise. Here’s Anil, a technology journalist, talking about his reaction to the statement.
Anil: Too little, too late and no, no, no amount of cherry-picked data can outweigh lived experiences because a, anyone with an automobile will tell you that ethanol gives reduced efficiency and it's basic physics, really basic physics.
Uh, the ministry’s, quote, unquote fact check, said the octane number of ethanol is far lower than petrol. If it was higher, ethanol would've been the go-to fuel and not petrol. Petrol is easier to ignite, that's why it's used as a fuel.
So that, that, that seemed like a desperate attempt to save face and nobody bought it. You could see it. Nobody bought it.
Kudrat (Host): In its early August statement, the Ministry also said that starting April 2023, the Society of Indian Automobile Manufacturers, or the SIAM – that’s the body that represents automobile manufacturers – assured them that most manufacturers have started making E20 compliant vehicles starting April 2023.
But, Saurabh said that he finds that unfair. The government wants to keep increasing the %age of ethanol in fuel, meaning the E10 vehicle he bought in 2021 will soon become outdated. And the same for an E20 vehicle that someone else might buy right now.
Saurabh: But since we are making a big investment, let's say I purchased a 10 lakh rupees car. So 10 lakh rupees for a middle class or a lower middle class family is a huge sum right? They save a lot and for years they save to purchase a vehicle. They think a lot and all of these things. But ultimately, when they purchase a vehicle, let's say the next year government is putting, uh, E 20, they purchase a E 10 vehicle.
Government is putting E 20. Now, in, let's say five years, they will have problems with their vehicle. Uh, and already with the noncompliant fuel, they will have, uh, loss of power.
Kudrat (Host): Consumers also said that they’re upset mostly because they feel that they didn’t get a choice here. That the govt just came up with this policy and imposed it on everyone.
Anil: Especially the worst part. I, in my opinion, is that there is no choice here.
Give us a choice. Give us a choice. Label it properly, like Unblended petrol, E10, E 20. Sell them at different price points. The purists, the automobile purists who don't want their engine to be, be corroded by, Ethanol can pay 1 21, 1 30 piece per liter for petrol. And those who are okay will get the cost benefits of using blended, but we are not getting that either.
But that is this. This is basically license raj all over again, in my opinion.
Kudrat (Host): The experts The Signal Daily spoke to said that while they welcome this move, the government didn’t communicate this rollout properly.
India isn’t the first country to sell blended petrol. The US, Brazil and even Thailand have sold it before. But, the difference is that in those contexts, the rollout was slower. Also, by law, petrol pumps have to label what kind of fuel is blended and what isn’t. But, that hasn’t happened in practice. Here’s automotive expert Vinay Pipparsania talking about this. He is the founder of Millenstrat Advisory and Research, which consults on strategies in the global automotive and mobility industry.
Vinay: Why has this suddenly become so concerning? It's because it hasn't been communicated very well as always.
Uh, and, uh, these pumps, uh, you know, it's been mandated or they say almost 17,000 gas stations already have this, uh, particular, you know, sell E 20 blends.
But the challenge is, is that we don't know. And, you know, uh, somebody can't even ask like, where is this E 10, E 20, normal? There's no such sort of labeling or tagging or any kind, so people are very confused. I think the government could have done a much better job of rolling it out. They could have rolled it out in phases so that people can understand.
We know where the new vehicles are. I mean that that data is all available from registration and those are the people that can, won't have concern. But the ones where there's a sort of older vehicle population, maybe we could have communicated that better.
Kudrat (Host): On the point of corrosion, Vinay said that it’s true that ethanol causes corrosion. He said that customers should make sure to go through their owners’ manuals.
Vinay: Now, are these damages to a vehicle long lasting?
Uh, yes. They could be. Uh, there is corrosion because when you have ethanol, there is water production inside the cylinders and on the seals. That is what causes corrosion, which is why regular maintenance becomes that much more important and that is something that you should do.
However, the best thing to do is to check your owner's manual and see what is it that they have, uh, advised and suggested.
Kudrat (Host): Last week, The Core’s Govindraj Ethiraj spoke to Puneet Gupta, Director of S&P Global Mobility, India & ASEAN about this topic too. Puneet said auto-owners should address issues with their vehicles well in advance.
Govindraj: But what should people do today? I mean, if they feel that their fuel efficiency is not good or they suspect some other problem, including, let's say, pickup and acceleration and so on, what can they do today?
Puneet Gupta: So first thing is don't panic, right? I mean, obviously, you know, this is a national initiative and obviously it is good for the government, good for the country, right? And good for the people of India.
So first thing is don't panic. You need to be careful. For example, you know, E20 ethanol has a higher octane value.
So it means that you can actually fine-tune your engine, that if you actually fine-tune your engine or, you know, fine-tune your ECU, then there is a possibility that you get better power or performance, you know, from the same fuel that you are using. But in case if you are seeing some leakages around during maintenance and if workshops are recommending you to get your hoses changed, you know, or your gasket changed at some point in time, then take it seriously, right? Because if you don't do that, then damage can be much more than even what you may be expecting right now.
But I think this is what we have to use too because at the end of the day, you can live with lower efficiency but you can't live with higher pollution, you know, because I think cities like Delhi may not be every part of this country but cities like Delhi have become unlivable because of high pollution. Clearly, if we are using anything which is environmentally friendly, I think that is good for the nation, good for the people of this country.
Kudrat (Host): India’s decision to move forward with blended petrol makes sense, from an energy security perspective, and because it helps our farmers as well as reduces greenhouse gas emissions. And, more consumers would be on board if they saw more immediate kickbacks too, said Abhishek Jha of UrjaNovaC.
Abhishek: If government is saying, okay, let's say 5% or 3% drop in efficiencies, I will drop price by 3% equivalent, uh, amount, then I think people should not or will not complain. So those measures needs to be taken to compensate, uh, larger citizen for that, that thing.
So I think should, uh, government should pass on part of the benefits to the larger consumers because anywhere a an a pure consumer in India is paying almost roughly 55 to 60% in terms of taxes.
So how much you are going to increase as a consumer, I would certainly, uh, uh, suggest that yes, we, uh, we, we welcome, come this initiative. I think government has done a great thing to expedite this blending. However, the burden of the extra that, uh, that cost that is incurring, some of it has to be, uh, uh, offloaded.
Kudrat (Host): This story is about blended petrol; it’s also about trust. On paper, the government’s blended petrol policy is about meeting India’s climate goals, increasing our farmers’ incomes, and energy security. But, on the road, motorists feel blindsided. They feel that they’re paying the price for the ‘greater good.’ There’s a gap between the government’s messaging and people’s lived experiences. And, that’s causing a breakdown in trust among Indian consumers.
It’s evident that India’s fuel future will be cleaner and more secure. But, if drivers don’t trust the journey, they’ll see every kilometre as a loss, not as a step forward. And that trust — not technology — may decide whether blended petrol succeeds.
Kudrat (Host): That's all for today. You just heard The Signal Daily. We don't do hot takes. Instead, we bring you deep dives into the how and why of consumer trends. The Core produces The Signal Daily. Follow us wherever you get your favourite podcasts.
To check out the rest of our work, go to www.thecore.in.
If you have feedback, we'd love to hear from you. Write to us at [email protected] or you can write to me personally at [email protected].
Thank you for listening.
