Page 48 - Policy Economic Report - August 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

The use of E-20 gives better acceleration, better ride quality and most importantly, lowered carbon
emissions by approximately 30% as compared to E10 fuel. Ethanol’s higher-octane number (~108.5
compared to petrol’s 84.4) makes Ethanol-blended fuels a valuable alternative for higher-octane
requirements that is crucial for modern high-compression engines. Vehicles tuned for E20 deliver better
acceleration which is a very important factor in city driving conditions. Additionally, Ethanol’s higher heat
of vaporization reduces intake manifold temperatures, increasing air-fuel mixture density and boosting
volumetric efficiency.

Previously Petrol was being sold in India with Research Octane Number (RON) of 88. Today, regular petrol
in India has a RON of 91 to meet the requirements of BS-VI, which aims to reduce harmful emissions.
However, this has again been improved further to RON 95 with blending of Ethanol 20, resulting in better
anti knocking properties and performance.

The critiques suggesting that E20 causes a “drastic” reduction in fuel efficiency are misplaced. Vehicle
mileage is influenced by a variety of factors beyond just fuel type. These include driving habits,
maintenance practices such as oil changes and air filter cleanliness, tyre pressure and alignment, and even
air conditioning load.

Extensive discussions have been carried out with the Society of Indian Automobile Manufacturers (SIAM)
as well as prominent manufacturers of vehicles. The efficiency drop (if any) in E 10 vehicles has been
marginal. For some manufacturers, vehicles have been E 20 compatible from as far back as 2009. The
question of any drop in fuel efficiency in such vehicles does not arise.

The alternative of going back to E-0 Petrol would involve losing the hard fought gains on pollution and the
success achieved in energy transition. The roadmap of the IMC had been in the public domain from 2021
and laid out a calibrated path to reaching E-20. Since then, there has been a period of over 4 years which
has allowed vehicle technology to improve, supply chain to be calibrated and an overall eco-system
developed.

Furthermore, it is noteworthy that Brazil has been successfully running on E27 for years with zero issues.
The same automakers such as Toyota, Honda, Hyundai etc. produce vehicles there too. Moreover, safety
standards for E20 are well established through BIS specifications and Automotive Industry Standards. In
most parameters including drivability, startability, metal compatibility, plastic compatibility, there are no
issues. Only in case of certain older vehicles, some rubber parts and gaskets may require
replacement earlier than in case non blended fuel was used. This replacement is inexpensive and can be
easily managed during routine servicing. It may need to be done once in the life time of vehicle and is a
simple process to be carried out at any authorized workshop.

Some concerns have been voiced that ethanol blended petrol should be cheaper than non-blended fuel
and that this cost advantage has not been passed on to the customers. They are referring to a NITI Aayog
report. In 2020-21, when the Report of NITI Aayog was prepared, Ethanol was cheaper than Petrol. Over
time, procurement price of Ethanol have increased and now the weighted average price of Ethanol is
higher than cost of refined Petrol.

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