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India’s E20 - Ethanol gamble explained | Let Me Explain 148 | Pooja Prasanna

Is E20 petrol really damaging vehicles? Or is the debate missing the bigger questions? The govt says it’s safe. But the report they cite is not public yet.

Written by : Pooja Prasanna, Lakshmi Priya

Those are people who say their cars and bikes have suffered after using ethanol-blended petrol.

For months now, falling mileage and concerns about vehicle performance have become a national political flashpoint.

But the union government has repeatedly dismissed these claims.

Recently, vehicle owners gathered at Delhi's Jantar Mantar, holding placards that read, "Humari Gaadi, Humara Adhikaar" - Our vehicle, our right.

These too have been dismissed as politically motivated.

Union minister Nitin Gadkari, who is not the Petroleum Minister, has been the most prominent face of India's ethanol push. And he has asked journalists to show even one vehicle that had been damaged.

Others like journalist Rahul Shivshankar, have defended the policy by arguing that ethanol-blended petrol has been in use for years. If it really caused widespread damage, where are the millions of affected vehicles?

But those arguments don't answer the questions that matter.

Why has a report by the Automotive Research Association of India not been made public?

Why is E20 becoming mandatory instead of allowing a choice?

And why has a fuel that was promoted as a cheaper alternative not translated into lower prices for consumers?

In this episode of Let Me Explain, we'll examine the science, the economics and the politics behind India's ethanol experiment.

Let Me Explain

Every episode of Let Me Explain starts with a simple question: What do the facts actually say? And when someone says, "Just trust us," asking to see the evidence isn't being anti-government or anti-policy—it's just common sense. That's what Let Me Explain is here to do. 

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First let's start with what the Ethanol Blended Petrol Programme or EBP is. 

Ethanol-blended petrol is not some new experiment. Many countries have used it for 

years. India too has had ethanol-blended fuel for over a decade.

Until recently, petrol sold in India contained 10% ethanol, or E10. Many vehicles, especially those made in the last ten years, are already designed to handle that.

Now, India has moved to 20% ethanol blending, or E20, and the union government wants to increase the percentage even further.

The government says the expansion has reduced crude oil imports, saved foreign exchange, lowered greenhouse gas emissions and strengthened farmers' incomes.

Even if all this is taken at face value- The obvious question here is: Can vehicles actually handle it?

The answer is: Yes, but with conditions.

Modern BS6 vehicles have been redesigned to run on E20 fuel. Manufacturers have upgraded engine components and software to make them compatible.

But there is still mileage loss. 

The government's own numbers, from a NITI Aayog report in 2021, say exactly how much. If your vehicle was built specifically for this fuel, expect to lose 1 or 2% mileage. 

If it's an older model, expect a drop in mileage of 6-7% for cars, and 3-4% for bikes and scooters.

Nobody disputes this, not even the government’s own researchers. 

But that’s basically where the easy agreement ends. Because if the science is settled, everything that’s happened since raises a very different set of questions, about money, about trust, and about who’s actually benefiting from all this.

So let’s start with money. If this fuel gives you fewer kilometres per litre, shouldn’t it cost less? This is the question no minister has really answered.

Ethanol used to be the cheaper option, and it isn't anymore. 

The government’s 2021 roadmap had recommended pricing ethanol blends lower than petrol, and offering tax relief, specifically to make up for that shortfall. 

But none of that happened, and now consumers are paying full price for the fuel.

The roadmap also clearly said that E10 petrol should continue to be sold alongside E20 as a "protection grade" fuel for older vehicles.

It pointed to Brazil and said transition took 30 years and E 10 is available even now.

But if you own a vehicle that runs on petrol, write to me at lme@thenewsminute.com  and tell me if you are given the option of E10 in your pump. If you have had any experience with E20 petrol, I want to hear from you. Has your mileage changed? Has your vehicle stopped? Or has nothing changed?

Tehseen Poonawalla, the political analyst who led the Jantar Mantar protest, has rightly asked why the secrecy around a report prepared by the ARAI.

ARAI recently held a press meet and said E20 is safe, just the small drop in mileage. 

But then Times of India broke the story just two days later that the report also says that if E10 compliant vehicles use E20- then rubber parts in fuel component systems will get deteriorated. This includes- hoses, gaskets, seals and O rings.

This has never been revealed by the government. Why?  

There's another layer to this, too. The government recently announced zero excise duty on future ethanol blends, framing it as good news for consumers.

So who really benefits? That would mostly be oil companies, ethanol producers, sugar mills and grain distilleries supplying this fuel. Now that's not necessarily wrong as a policy. But it need not trickle down to the consumer.

The other concern is the fuel itself.

Ethanol naturally absorbs moisture from the air much more easily than petrol. That means storage and transportation become far more critical.

Think about the journey fuel takes. It leaves the refinery, travels in tankers, is stored underground at petrol bunks, and is finally pumped into your vehicle.

At every stage, especially during India's humid monsoon, there's a risk of water entering the fuel.

Even something as routine as opening a tanker at a fuel station while it's raining can introduce moisture. If enough water gets into the fuel, the ethanol can separate from the petrol, affecting fuel quality.

Recent reports from Mumbai during the monsoon have raised precisely these concerns.

So while E20 works in theory, it also demands a much stronger fuel distribution and storage system.

Then there's another challenge.

India's roads are filled with older vehicles.

A vehicle is legally expected to last at least 15 years. But many vehicles made before the BS6 era were never designed for higher ethanol blends.

Some may run without any issues. Others may not.

Higher ethanol blends can loosen deposits inside ageing engines because ethanol is an effective cleaning agent. That sounds like a good thing, but in older engines it can dislodge sludge that then blocks fuel systems.

And here's the biggest problem.

If your vehicle develops a fault, proving that ethanol was the reason is incredibly difficult. Without proper testing and documented evidence, it's almost impossible for an individual consumer to establish that a particular engine failure was caused by higher ethanol content.

Now, in the Ethanol controversy, why does one man’s name keep coming up?

That man is Nitin Gadkari, India’s Road Transport Minister, and for years, one of the loudest cheerleaders for ethanol. 

He isn't even the Petroleum Minister, that's Hardeep Singh Puri's portfolio.

Back in 2013, Gadkari’s Purti Group, then running sugar mills and ethanol plants in Nagpur, was raided by tax officials over a web of shell companies.  A scandal that led to him stepping down as BJP president at the time.

That business has since been restructured. His sons Nikhil and Sarang now run it under new names, Cian Agro Industries and Manas Agro. 

Both have posted extraordinary numbers, revenue and market value up by thousands of percent over roughly 20 years.

The opposition has called this a straightforward conflict of interest and demanded a Lokpal probe. 

And it is not just the economics. Maharashtra, Gadkari’s home state has sugarcane farmers who are happy with the policy, giving him political brownie points. 

Gadkari, of course, denies any wrongdoing, pointing out his company accounts for less than half a percent of India's total ethanol output, and that ethanol pricing is set by the Cabinet, not by him personally. 

That’s true, and also somewhat beside the point. Even people opposing him on other grounds, like farmer leader Raju Shetti and NCP-SP spokesperson Anish Gawande, have acknowledged that hundreds of sugar mills and ethanol producers across the country have seen the same windfall. 

But the fact that it’s a small market share doesn't erase the optics of a minister's own family cashing in on a policy he's spent years personally championing.

So what are experts suggesting?  

Not abandoning ethanol. But making the transition more gradual

Brazil, often cited as a success story, took more than three decades to make the transition.  

India should have continued to sell E10 fuel alongside E20, especially for owners of older vehicles, until the transition was complete.

Because the debate isn't simply about whether ethanol is good or bad.

It's about whether India's vehicles, fuel infrastructure, and consumers were all equally prepared for the transition.

When you're asking crores of vehicle owners to simply trust a transition this large, refusing to publish the evidence you keep citing, it isn't a minor process complaint. It's a real, legitimate gap between what the government claims and what it's actually shown.

For feedbacks, write to lme@thenewsminute.com

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Produced by Megha Mukundan, Script by Lakshmi Priya M, Edit by Nikhil Sekhar ET, Camera by Ajay R