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In July 2025, the Union government announced with considerable fanfare that it had effectively reached the E20 milestone, reporting ethanol blending of 19.93% during the month and presenting it as the fulfilment of the target advanced from 2030 to ESY 2025-26 under the National Policy on Biofuels. Prime Minister Narendra Modi hailed it as a landmark in India’s energy transition. The announcement, however, triggered consumer backlash, online campaigns, RTI applications seeking disclosure of actual blend ratios at retail outlets, and a public interest litigation in the Supreme Court, filed by advocate Akshay Malhotra, seeking mandatory labelling of ethanol content at fuel stations and continued availability of ethanol-free petrol. 

On September 1, 2025, a bench comprising Chief Justice B.R. Gavai and Justice K. Vinod Chandran dismissed the petition, with the Attorney General characterising the petitioner as a “name lender” acting for a “huge lobby” – a striking response to a plea for basic consumer information.

The controversy resurfaced on June 30, 2026, during the hearing of a Special Leave Petition filed by Bharat Petroleum Corporation Limited against a Karnataka high court order concerning ethanol allocation. Attorney General R. Venkataramani reportedly told a bench of Justice M.M. Sundresh and Justice Sheel Nagu that “20 per cent ethanol blending is something that the government is experimenting with” and that results would be available the following year. His office promptly issued a clarification denying that the national E20 programme had been described as an “experiment”, maintaining that the submissions related only to the commercial dispute before the Court.

Whether or not the word was used in the broader sense attributed to it, the episode exposed the opacity surrounding the programme. A policy affecting roughly 300 million vehicle owners was implemented without public consultation, independent peer-reviewed assessment of its effects on the existing vehicle fleet, consumer choice of ethanol-free petrol, or any compensating price reduction. The ensuing controversy, official clarification and the Supreme Court’s order maintaining status quo on ethanol allocation together illustrate the political context in which the E20 programme has unfolded.

The policy, on its own terms, makes sweeping promises. But what does the independent evidence suggest it delivers? Who bears its costs? Who captures its benefits, and does it survive a rigorous social cost-benefit analysis?

A timeline of E20 policy

India’s Ethanol Blended Petrol (EBP) Programme began in 2003 but progressed slowly, with blending reaching barely 1.5% by 2014. The National Policy on Biofuels, 2018, targeted 20% blending by 2030, but in 2021, Modi advanced the deadline to Ethanol Supply Year (ESY) 2025-26. Oil Marketing Companies achieved 10% blending in June 2022, five months ahead of schedule, followed by averages of 14.60% in ESY 2023-24 and 17.98% in ESY 2024-25. 

The roadmap envisaged expanding ethanol production capacity from 700 to 1,500 crore litres, introducing E20 in phases from April 2023 and making it available nationwide by April 2025.

A critical feature of this timeline received little public attention. Vehicle manufacturers were expected to introduce E20-compatible models only from April 2023, with engines fully optimised for E20 arriving from April 2025. Yet the country’s vast existing fleet – designed largely for E10 or lower – was effectively required to use E20, without any option to purchase ethanol-free petrol.

Consumers paying dearly for petrol

The impact of E20 must be assessed against India’s already high fuel prices. On June 29, 2026, E20 petrol retailed in India at about Rs 108.71 per litre (US$ 1.15), compared with a global average of US$ 1.36 for mostly E5 to E10 petrol. The comparison, however, is misleading because the global average is inflated by high-income countries. Brazil provides the most economically meaningful benchmark because consumers routinely compare fuels on a cost-per-kilometre basis. 

More relevantly, regular (non-ethanol) petrol was cheaper in Pakistan (US$0.90), Bangladesh (US$1.03) and marginally costlier only in Nepal (US$1.19) and China (US$1.24), despite India’s large refining capacity and access to discounted Russian crude since 2022.

Measured against incomes, the burden becomes starker. At the national floor wage of about Rs 350 per day, a worker spends nearly one-third of a day’s earnings to buy a litre of petrol. Fuel taxation remains among the principal reasons. Between 2014 and 2020, as global crude prices fell sharply, the Union government repeatedly increased excise duties instead of passing the gains to consumers. Excise duty was raised again by Rs 10 per litre in May 2020, pushing central excise collections from Rs 2.38 lakh crore to Rs 3.84 lakh crore in 2020-21 – a 67% increase.

Against this backdrop, consumers receive no price advantage from E20 despite its lower energy content and lower production cost. While ethanol blending may reduce the national oil........

© The Wire