20% Ethanol Even in Premium XP95 Petrol: Indian Oil Corporation (IOCL)
The question of whether premium fuels in India would remain free from ethanol blending has now been answered. An RTI reply has confirmed that Indian Oil Corporation’s high-octane XP95 petrol contains 20 per cent ethanol, the same as regular petrol sold in the country. This development brings premium-grade fuel under the same blending standard as standard Motor Spirit and raises new questions about fuel pricing and the potential impact on vehicle performance.
Confirmation and Policy Shift
The confirmation came in an RTI response dated July 3, 2025, from IOC’s Public Information Officer. The corporation stated that both XP95 and standard petrol in Kolkata have 20 per cent ethanol by volume. Traditionally, premium fuels were expected to have purer formulations to cater to performance vehicles. Including them in the E20 programme marks a clear policy change.
India’s ethanol blending programme has accelerated rapidly. From just 1.5 per cent blending in 2014, the country has reached the E20 standard five years ahead of the original 2030 target. Petroleum Minister Hardeep Singh Puri recently noted that the programme has saved over ₹1.36 lakh crore in foreign exchange and channelled ₹1.18 lakh crore to farmers through ethanol procurement.
Pricing Concerns Despite Lower Production Costs
While ethanol costs less to produce than petrol, around ₹61 per litre in Delhi compared to ₹95 per litre for pure petrol, the price at the pump does not reflect this difference. Taxes, excise duties, VAT, and subsidy structures keep the final price unchanged, limiting any direct savings for consumers.
Consumer groups have pointed out this pricing gap, questioning why E20 fuel often costs the same or more than unblended petrol. Recommendations made in the past, including those from NITI Aayog to reduce taxes and pass on savings to consumers, have not been implemented. This has led to ongoing criticism that the economic benefits of ethanol blending are not being shared with vehicle owners.
Performance, Compatibility, and Efficiency Issues
Vehicle owners have expressed concerns about reduced mileage and potential engine wear. While the government has dismissed reports of major fuel efficiency losses as unsubstantiated, real-world user experiences suggest that some vehicles, particularly older ones, may face problems. Many cars not originally designed for high ethanol content could require more frequent maintenance. Even newer models may see a small decline in efficiency of about 2–3 per cent annually as ethanol content rises.
From a technical perspective, ethanol has a higher octane rating of around 108.5 compared to petrol’s 84.4. This can help reduce knocking and improve combustion. It also absorbs more heat during vaporisation, which can cool the intake air. However, ethanol contains less energy per litre than petrol, which explains the mileage drop some users have reported.
The blending change affects performance car owners in particular. XP95 was preferred by enthusiasts for its consistent performance characteristics. With ethanol content now standardised at 20 per cent across fuel grades, these drivers may have to reassess tuning, maintenance, and performance expectations.
Government Vs Common Man
Since 2014, the ethanol blending programme has prevented an estimated 698 lakh tonnes of carbon dioxide emissions. The scale of the rollout has been substantial, with blending volumes rising from 38 crore litres in 2014 to 661 crore litres in June 2025. The government is already preparing the next phase, drafting standards for E27 fuel with 27 per cent ethanol content. That is what the government says.
The Automotive Research Association of India is currently assessing the engine modifications needed for vehicles to operate on E27. This indicates that higher ethanol blends are firmly in the policy pipeline. For now, most modern engines are certified for E20, but owners of older vehicles may need to take extra care.