E20 Petrol Saved Consumers Nearly Rs 30/Litre During Iran War Crude Price Spike, Says Govt

The Central Government has once again defended its E20 petrol programme, saying ethanol blending shielded consumers from a global crude oil spike during the war between Iran and the US. Petrol in Delhi would have cost Rs 125 per litre when crude touched $135 a barrel without the blend, the Petroleum Ministry said.

Consumers instead paid Rs 94.77 per litre, claims the government, because 20 percent of every litre came from domestically produced ethanol procured at pre-agreed prices. That ethanol supply stayed insulated from the crude price surge, and the ministry said the arrangement saved motorists nearly Rs 30 per litre at the peak of the crisis.

Image Source

India's Ethanol Blended Petrol programme has generated more than Rs 1.97 lakh crore in foreign exchange savings since its launch, the ministry said. It has also substituted over 316 lakh metric tonnes of crude oil imports and cut carbon dioxide emissions by more than 950 lakh metric tonnes.

E20 petrol, blended with 20 percent ethanol and rated at 95 octane (mandated since May 2026), currently retails at Rs 102.12 per litre in Delhi. Pure 100-octane petrol costs Rs 169 per litre in the capital, a gap the ministry cited as evidence of the ethanol programme's value.

Retail petrol and diesel rates stayed unchanged for around 75 days after the West Asia conflict began on February 28, despite volatile crude prices. However, fuel prices were later raised by Rs 7.5 per litre in May and have not gone back to their previous levels since then.

The clarification by the Petroleum Ministry followed Union Road Transport Minister Nitin Gadkari's admission in Parliament last week that E20 petrol can affect a vehicle's mileage. A joint study by the Automotive Research Association of India, the Society of Indian Automobile Manufacturers and Indian Oil Corporation found that E20 fuel can reduce mileage by 2 to 6 percent, Gadkari said in a written Lok Sabha reply.

The drop in mileage depends on the vehicle's category and age, he added, though E20 does not damage engines or require modifications. The same study found ethanol-blended petrol improves acceleration and ride quality while cutting carbon emissions by close to 30 percent, Gadkari said.

Rubber parts and gaskets in BS-III vehicles built before 2016 may need replacement under E20, he noted, though the fuel does not significantly affect overall vehicle performance.

Opposition parties and consumer groups have criticised the E20 rollout over compatibility concerns with older vehicles, citing reduced efficiency, higher maintenance costs and possible liability for engine damage. The Centre maintains the rollout has been phased, backed by scientific studies, and that automakers continue honouring warranty claims for E20-certified vehicles.