The Press Information Bureau's Fact Check Unit has denied the claim that the 20% ethanol can damage the vehicle.
The Union government has exempted petrol blended with 22–30% ethanol from central excise duty, extending the same tax benefits currently available to E20 fuel. But as India moves towards higher ethanol-blended petrol, a new concern is beginning to emerge among owners of older vehicles: what happens if E20 fuel damages the vehicle, and will the insurance company pay for it?
Some social media posts are claiming that using E20 fuel could lead to rejection of vehicle insurance claims.#PIBFactCheck
— PIB Fact Check (@PIBFactCheck) June 16, 2026
❌ This claim is #FAKE
✅ Motor insurance policies remain valid with the use of E20 fuel.
???? Always verify such claims through official sources before… pic.twitter.com/XufhIQ7xI2
The decision aims to encourage higher ethanol blending, support cleaner energy adoption, reduce dependence on fossil fuels, and strengthen India's biofuel and sustainability objectives.
The E20 fuel transition has raised compliance concerns. An ICICI Lombard FAQ emphasizes that standard insurance might not cover engine damage caused by using E20 fuel in older, non-compatible vehicles. Vehicle owners must verify engine compatibility and review policy terms to ensure they don't face unexpected out-of-pocket repair bills, reported India Today.
“Using a fuel your vehicle was not made for can be treated as improper use or negligence. Insurers may review these claims from that angle, and rejection is possible,” ICICI Lombard said in a blog post published on June 9, 2026, cited by India Today.
Vehicle owners have raised concerns on social media that E20 fuel may cause issues in older, non-compatible cars and two-wheelers. The Indian automobile industry began selling E20-compatible vehicles from April 2023. Most vehicles sold before this rollout were not designed to be compatible with E20 fuel standards and blends specifically.
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