E20 Fuel Usage Results in Minor Mileage Drop, Yet National Benefits Outweigh Costs

Officials from the automotive and petroleum sectors, along with the Automotive Research Association of India (ARAI), have indicated that using 20 per cent ethanol-blended petrol (E20) may slightly reduce fuel efficiency by 2-4 per cent. However, they argue that the national benefits outweigh the increased fuel costs for consumers. The Society of Indian Automobile Manufacturers (SIAM) also reassured that vehicle warranties will remain intact despite concerns.

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SIAM Executive Director PK Banerjee addressed concerns about fuel efficiency, acknowledging a minor decline due to the fuel's nature. "The mileage related challenges, there is admittance, clearly, that due to the intrinsic nature of the fuel there is marginal drop, but it accrues the huge benefit to the nation, to the society, to the farmer, to the environment, to the exchequer and all of us," he stated. He dismissed claims of a 20-50 per cent drop in efficiency as misinformation.

Ethanol Blending Benefits

Federation of Indian Petroleum Industry (FIPI) Advisor PS Ravi highlighted ethanol blending's advantages. It has boosted rural prosperity by increasing farmers' earnings, with Rs 40,000 crore paid for ethanol procurement in 2025 alone. Since 2014-15, it has replaced 245 LMT of crude oil and saved Rs 1.44 lakh crore on foreign exchange. In 2025, forex savings are projected at Rs 43,000 crore.

Ravi added that ethanol blending has reduced India's reliance on crude imports, protecting it from global oil price fluctuations and supply issues. This shift gives India geopolitical leverage as a leader in sustainable fuels and a model for other developing nations. Ethanol blending has also cut carbon dioxide emissions by 763 LMT.

Warranty and Insurance Concerns

Addressing warranty and insurance issues related to E20 usage in non-E20 vehicles, Banerjee stated: "The E20 fuel-related insurance and warranty, any claim, whoever is spreading is misplaced. There will be honouring of the warranty without any ifs and buts by OEMS." He noted millions of vehicles have used E20 without reported breakdowns.

ARAI Director Reji Mathai referenced studies from 2016 and 2021 showing no adverse effects from E20 use. "In the testing we have found them not to have any adverse impact...they have been accepting the E20 fuel," he said. The reports remain confidential due to OEM data privacy.

Economic Impact

Toyota Kirloskar Motor's Vikram Gulati emphasised ethanol blending's broader economic benefits. He noted it reduces India's current account deficit by saving on foreign exchange. "The money that would have been sent outside for importing crude is now going to farmers," Gulati explained, enhancing their economic status and contributing to the economy.

Gulati also stressed that ethanol blending supports India's smooth transition towards sustainability without disrupting the economy. It fosters self-reliance in energy, technology, and raw materials. This shift aligns with India's goals for a sustainable future.

The slight drop in fuel efficiency due to E20 usage is outweighed by its national benefits. Ethanol blending supports rural prosperity, reduces import dependence, and enhances India's geopolitical standing. Despite concerns about warranties and insurance claims, officials assure continued support for vehicle owners using E20 fuel.

With inputs from PTI