For petrol cost parity, E85 should be 25% cheper: IIT Delhi-AIDA research

E85 may need to be priced around 25 percent below petrol to achieve similar running costs per kilometre, says the newly penned white paper by researchers at IIT Delhi and the All-India Distillers’ Association (AIDA).

The paper, ‘Flex-Fuel Vehicles: Enabling Energy Security and Sustainable Mobility in India’, argues that E85 pricing should not be assessed only by comparing the price of a litre with petrol. Since ethanol has lower energy density, vehicles generally travel fewer kilometres on a litre of E85. Therefore, the authors say consumers should compare fuels on a cost-per-kilometre basis.

The paper, authored by IIT Delhi researchers Prof. PMV Subbarao and Saptashish Deb, uses an illustrative example of petrol priced at Rs 100 a litre, with a vehicle delivering 20 km per litre on petrol and 15 km per litre on E85. At Rs 82 per litre, E85 would cost about Rs 5.47 per km, compared with Rs 5 for petrol. To achieve the same running cost, E85 would need to be priced at around Rs 75 a litre, or 25 percent below petrol.

The authors, however, stress that the 25 percent figure is an illustration and not a recommended national pricing benchmark.

India introduced E85 at 48 public-sector oil marketing company outlets in June 2026, with plans to expand availability to 500 outlets by December and around 5,000 by December 2027. E85 is intended for flex-fuel vehicles (FFVs) and is being developed separately from the nationwide E20 programme.

The paper proposes a dynamic ethanol-gasoline price linkage framework, incorporating fuel prices, vehicle-specific fuel economy, regional conditions, E85 availability and ethanol supply.

It also recommends a dedicated strategy for two-wheelers, which account for around 60 percent of petrol consumption. The authors call for testing E20, E30 and E85-compatible motorcycles and scooters, along with coordinated expansion of E85 infrastructure on high two-wheeler-use corridors.

In a recent interview with I Am Renew, AIDA President Vijendra Singh said that ethanol is great for all stakeholders in the nation and flex-fuel policy should be promoted for better adoption of ethanol. Vice President Kushal Mittal held that the future of India is to ensure that there is energy security and farmer gains via all these biofuels policies.