Even as the country debates the impact of E20 petrol on cars and mileage, oil marketing companies (OMCs) are reluctant to undertake a large-scale rollout of E85 fuel outlets. This comes on the back of an earlier experience with E100 failing to generate demand.At the same time, the government is understood to be considering a slower rollout of E25 fuel amid concerns that higher ethanol blends could affect engines in existing vehicles. Automobiles manufactured between 2012 and March 2023 were designed to run on fuel containing up to 10% ethanol, while vehicles produced before April 2025 are not fully compatible with E20 blends either.
What are E100 & E85 fuels?
E100 consists entirely of ethanol and can only be used in vehicles equipped with flex-fuel engines. E85, a blend containing 85% ethanol and 15% petrol, also requires flex-fuel vehicles. The limited availability of such vehicles has become the biggest obstacle to the wider adoption of both fuels.Industry executives quoted in an ET report said that with nearly 400 pilot E100 retail outlets recording virtually no sales, OMCs want the number of flex-fuel vehicles on Indian roads to increase significantly before backing the government’s plan to expand ethanol-based fuels as a means of lowering crude import dependence and reducing fossil fuel consumption.
What is ethanol-blended petrol?
“We launched E100 on a pilot basis at nearly 400 fuel stations, but demand was almost non-existent. As a result, we have reduced the network to just five or six outlets because there were hardly any customers. Although the government has been encouraging us to expand, we prefer to wait and assess how the transition unfolds,” a senior Indian Oil Corporation official was quoted as saying.“Although automobile manufacturers have started introducing flex-fuel vehicles, current demand remains far below the level required to justify a large expansion of fuel dispensing infrastructure. Until sales of these vehicles gain meaningful traction, setting up additional E85 retail outlets would be premature,” the official said.Last month, Road Transport and Highways Minister Nitin Gadkari approved regulations permitting the use of E100 fuel. Under the proposed roadmap, the government aims to establish around 500 flex-fuel stations by December and expand the network to nearly 5,000 outlets across major cities by the end of 2027. However, implementation has been slow, with only about 48 fuel stations across the country currently dispensing E85 and demand remaining limited.
Pricing issues
Oil marketing companies attribute the weak response largely to the narrow price gap between E85 and conventional petrol. In Delhi, E85 is priced at Rs 82.12 per litre, compared with Rs 102.12 per litre for petrol. According to a report by the Council on Energy, Environment and Water (CEEW), petrol is currently 2-14% cheaper than E100. The report also noted that ethanol has a lower energy content than petrol, meaning vehicles require more fuel to travel the same distance. As a result, the effective operating cost of ethanol is estimated to be 15-25% higher than that of petrol.The report concluded that ethanol would need to be priced at around Rs 52-63 per litre to become more economical than petrol. This level is significantly below the production cost of any commercially viable feedstock assessed. Until pricing becomes more competitive, the report said, fuel retailers are unlikely to aggressively promote ethanol-based fuels.
The E20 petrol woes
Meanwhile, Petroleum and Natural Gas Minister Hardeep Singh Puri on Monday rejected reports suggesting that consumers are facing problems with E20 fuel, describing such claims as a “misrepresentation.”
Challenges of ethanol-blended petrol
He said any decision to move to a higher E25 ethanol blend would be taken only after detailed testing is completed and the findings are reviewed with automobile manufacturers.Responding to the debate over 20% ethanol-blended petrol, Puri said the fuel has been widely accepted by both vehicle manufacturers and consumers. “Automobile manufacturers and those servicing these vehicles have consistently said there are no issues. I fail to understand why this debate has suddenly surfaced,” he said, adding that the concerns being raised are a misrepresentation.The minister also said the rollout of E85 fuel is still at an early stage. According to him, expanding its availability will take time because it requires the development of new retail infrastructure, including fuel stations capable of dispensing the blend.
