Why E20 Petrol Costs More Than Expected: Centre Clears the Air

Amid the Ethanol row in the nation, the Central government has once again explained why E20 petrol that contains 20% ethanol and 80% petrol, is not cheaper than regular petrol despite using renewable fuel.

Many people believe that adding ethanol must have led to reducing the prices. However the Ministry of Petroleum and Natural Gas clarified that the cost of ethanol is itself higher because the process of producing it is expensive. It further claimed that ethanol was introduced to India's energy security, reducing dependency on imported oils and support farmers.

Why E20 Petrol Is Not Cheaper

Based on the ministry, ethanol is produced from crops such as sugarcane, maize and grains. It is an initiative to grow these crops and benefit the farmers of India.
For maize-based ethanol, the procurement price has been increased over the years and now stands at around Rs 71.86 per litre, even before adding GST, transportation, storage and handling costs.

At the current international crude oil price of around 70 US dollars per barrel, producing E20 petrol actually costs more than producing conventional petrol.

The government said petrol prices would only become cheaper through ethanol blending if global crude oil prices were to rise sharply, beyond around 120 dollars per barrel.

Supporting Farmers Is One of the Main Goals

The key reason for the ethanol programme is to support the farmers of India. By purchasing ethanol at higher prices, farmers growing sugarcane, maize and other crops receive better and more stable incomes. Officials said the policy ensures that Indian farmers are fairly compensated while also encouraging domestic production of cleaner fuel.

Why India Is Promoting Ethanol Blending

The government said the main purpose of ethanol blending is to reduce India's dependence on imported crude oil. One must know that India imports a large portion of its crude oil requirements, making domestic fuel prices flexible to international market rates.

Government Rejects Claims That E20 Damages Vehicles

Several claims that the ethanol is damaging their vehicles but here's a catch. The centre dismissed any of such reports. The government claim that E20 is scientifically tested and validated fuel whose safety and compatibility is confirmed
According to the Ministry, E20 is a scientifically tested and validated fuel whose safety and compatibility have been confirmed by automobile manufacturers, oil marketing companies, testing agencies and regulatory authorities.

The government said consumers can safely use E20 fuel in vehicles approved for it and should not rely on unverified information or misleading claims circulating on social media.