Govt Dismisses Concerns Over E20 Fuel Impact On Mileage, Vehicle Life And Voided Insurance

The Petroleum Ministry issued a detailed clarification on Tuesday countering mounting criticism regarding 20% ethanol-blended petrol (E20), refuting claims of mileage drops, engine damage, and insurance voiding.

The ministry, in its note, also cited research by Indian Oil Corp., Automotive Research Association of India and Society of Indian Automobile Manufacturers, and consultations with automobile manufacturers to assert that E20 delivers better acceleration, smoother ride quality, and no significant fuel efficiency loss in compatible vehicles.

According to the ministry, some manufacturers have produced E20-compatible models since 2009, and in E10 vehicles, any efficiency drop has been marginal. In most performance parameters, including drivability, startability, metal compatibility, and plastic compatibility, no issues have been found. Only in certain older vehicles may some rubber parts and gaskets require earlier replacement, typically once in the lifetime of the vehicle and at low cost during routine servicing.

While concerns regarding E20 may have been put to rest, many from the industry suggested that petrol blended with 27% ethanol was being contemplated by the government.

To clarify on the oil ministry's future plans, it clarified that the government is committed to E20 until Oct. 31, 2026. Any move beyond this will follow an Inter-Ministerial Committee report, stakeholder consultations, and a formal government decision.

The ministry also rejected as "totally baseless" the claim that using E20 voids vehicle insurance, saying policy validity is unaffected. It accused some actors of selectively misinterpreting an insurance company’s tweet to create fear and confusion.

Officials also countered suggestions that E20 causes a 'drastic' drop in mileage, saying vehicle efficiency is influenced by factors such as driving habits, maintenance, tyre pressure, and air-conditioning load. They pointed to Brazil’s successful long-term use of E27 fuel with no widespread technical issues, often in vehicles made by the same automakers that operate in India.

The clarification from the ministry comes after backlash from netizens and skeptics on various social media platforms. Although the govt may have clarified it's stance, a LocalCircles survey of over 36,000 vehicle owners across 315 districts found that 44% want the E20 policy rolled back, and over 40% reported a mileage drop of 15% or more. Critics have also flagged cases of corrosion in older cars, damaged hoses, and increased maintenance costs, and argue E20 should be optional rather than mandated.

On the broader programme, the ministry said ethanol blending has saved over Rs 1,44,087 crore in foreign exchange, substituted about 245 lakh metric tonnes of crude oil, and is expected to deliver Rs 40,000 crore in payments to farmers in 2025. It acknowledged ethanol was cheaper than petrol in 2020-21 but is now more expensive, averaging Rs 71.32 per litre in 2024-25, yet blending continues for energy security, rural income, and sustainability goals.