Oil Minister Explains Why E20 Petrol Is Important for India and Farmers

Petroleum Minister Hardeep Singh Puri has pushed back against growing public concerns over E20 petrol, defending the ethanol blending policy as a cornerstone of India’s energy, economic, and environmental strategy. His remarks follow an increase in social media posts claiming the 20 percent ethanol blend reduces mileage and may harm engines.

Puri underlined that India has reached the E20 target five years earlier than planned, a jump from just 1.5 percent blending in 2014 to 20 percent in 2025. This transformation required setting up a nationwide ethanol production and distribution system. According to the minister, the programme has already delivered tangible results, saving ₹1.36 lakh crore in foreign exchange and transferring ₹1.18 lakh crore directly to farmers.

Fuel Efficiency and Vehicle Compatibility

Acknowledging that ethanol has a lower energy content than petrol, Puri said the resulting drop in mileage is modest. Government data suggests that vehicles built for E10 and tuned for E20 typically see only a 1–2 percent reduction in fuel efficiency. Older vehicles may record a 3–6 percent drop, but proper engine tuning can reduce this further.

Road Transport Minister Nitin Gadkari backed Puri’s claims, dismissing fears of engine damage. He stated that no global examples exist of vehicles failing due to E20 use. Gadkari admitted ethanol could cause a small drop in mileage but stressed that such an effect does not outweigh the wider benefits.

For older vehicles, the government says any necessary adjustments are minor, such as replacing rubber parts or gaskets after 20,000–30,000 kilometres. These are low-cost changes often carried out during routine servicing. All vehicles sold in India since April 2023 already have upgraded fuel system components designed for E20 compatibility.

Direct Gains for Farmers and the Economy

The ethanol programme has become an important support system for the agricultural sector, especially sugarcane growers. By creating a steady demand for by-products like B-heavy and C-heavy molasses, the policy has helped sugar mills maintain stable operations and make timely payments to farmers. Surplus and damaged foodgrains, which might otherwise be wasted or sold cheaply for export, are also diverted to ethanol production.

Puri said this shift allows farmers to act not only as food producers but also as energy suppliers. In addition to securing better prices for their crops, farmers now benefit from a market for agricultural waste and non-food biomass.

From an economic perspective, the gains are substantial. India imports over 85 percent of its crude oil needs, with the annual bill exceeding ₹22 lakh crore. By replacing part of this demand with ethanol, E20 is projected to save ₹35,000 to 40,000 crore annually in foreign exchange. This helps strengthen the trade balance and reduces the risk of sudden economic shocks when global oil prices rise.

Environmental Impact and Next Steps

Ethanol blending has a strong environmental case. Studies show sugarcane-based ethanol can reduce carbon dioxide emissions by around 65 percent compared to petrol, while maize-based ethanol offers a reduction of about 50 percent. Since its rollout, the programme has prevented millions of tonnes of CO₂ from entering the atmosphere, making it a key part of India’s climate strategy.

The government is also investing in second-generation ethanol technologies that use bamboo, crop stubble, and even seaweed as feedstock. These measures are intended to further reduce reliance on food-based raw materials while expanding production capacity.

The next step in the roadmap is the introduction of E27 petrol, which will contain 27 percent ethanol. Standards for this blend are expected to be finalised by August 2025, with gradual rollout to follow. Officials believe this will amplify the benefits already seen with E20, from lower import bills to greater farmer incomes and reduced emissions.

Puri’s remarks frame E20 as a strategic policy rather than a short-term fuel change. The government sees it as an integrated solution addressing energy security, rural livelihoods, and environmental goals.

While debate continues over its immediate impact on vehicle performance, the administration maintains that the long-term gains, from reducing oil imports to cutting emissions and supporting farmers, make ethanol blending a national priority. Or that is the official narrative now.

The real cost of “growing fuel” on soil condition, food security and food inflation finds no place in this narrative. We will have to wait and see if this line of reasoning wins or the middle-class owners of cars are able to get their point across and force a more nuanced review, if not a complete rollback.