Petrol import is cheaper but ethanol vital for self-reliance: Govt in Parliament

The Centre has clarified in Parliament that ethanol blending is not aimed at reducing petrol prices but at strengthening India’s energy security by cutting dependence on imported crude oil.

In a written reply to Congress MP Charanjit Singh Channi in the Lok Sabha, Minister of State for Petroleum and Natural Gas Suresh Gopi said ethanol can become costlier than pure petrol when global crude prices hover around $70 per barrel. However, he emphasised that the Ethanol Blended Petrol (EBP) programme is designed to shield the country from volatile international markets.

The government noted that nearly 20 per cent of petrol sold in India now contains domestically produced ethanol, which has helped cushion consumers from fluctuations in global crude prices. “Ethanol blending is not about making petrol cheaper, but about reducing exposure to imported crude,” the minister stated.

Oil marketing companies procure ethanol at remunerative rates to ensure fair returns to farmers. The procurement price of maize-based ethanol has risen to Rs 71.86 per litre, while the average cost for the 2024–25 ethanol supply year stood at Rs 71.55 per litre, higher than refined petrol.

Despite higher costs, the programme has delivered substantial economic gains. The government informed Parliament that ethanol blending has led to foreign exchange savings of Rs 1.66 lakh crore over the past five years.

Highlighting global comparisons, the Centre said petrol prices in Delhi (Rs 102.12 per litre in June 2026) remain lower than in several countries, including Bangladesh, Pakistan, Sri Lanka and Italy, even amid disruptions caused by the West Asia conflict.

Addressing vehicle compatibility concerns, the government said over 20 crore two-wheelers and 3 crore petrol cars are already using higher ethanol blends without verified evidence of widespread engine issues. It added that the transition to E20 fuel has been phased and scientifically validated.

The government ruled out reverting to lower blends, citing logistical challenges and reaffirming its commitment to cleaner, sustainable fuels under the national biofuel policy.