ICRIER Paper Says India Should Consider Temporarily Reducing Ethanol Component in Petrol From 20% to 15%
New Delhi: Amid the ongoing countrywide debate over ethanol blending in petrol, a paper published by the Indian Council for Research on International Economic Relations (ICRIER) has said that India should consider temporarily reducing ethanol component from the current 20% to 15%, reported Economic Times.
The paper argued that while the 20% target could continue to be the long-term goal, a temporary reduction to E15 could be considered in years when domestic ethanol availability becomes insufficient or the cost of continuing with E20 becomes disproportionately high in terms of food and feed prices.
"The final safeguard should be flexibility in the blending rate itself,” said the paper.
It also questioned the economics of using subsidised Food Corporation of India (FCI) rice for ethanol, highlighting that while rice supplied to distilleries was priced at around Rs 2,320 per quintal, FCI's average acquisition cost of about Rs 3,889 per quintal and an estimated economic cost of over Rs 4,100 per quintal in 2025-26.
The paper said that FCI rice should be a residual feedstock, used mostly when stocks are genuinely surplus, instead of becoming a permanent pillar of the ethanol programme, reported Economic Times.
The paper added that one can already see the food-versus-fuel pressure in sugar, wherein lower opening stocks, weaker production and diversion towards ethanol have resulted in a sharp rise in retail prices. The paper also proposed allowing larger sugar imports during shortages to augment domestic supply and cool prices.
The Bharatiya Janata Party (BJP)-led Union government’s E20 policy has faced severe backlash with online campaigns, RTI applications, and petitions in the Supreme Court demanding transparency as well as continued availability of ethanol-free petrol.
Complaints of of unusual wear and tear in engines, fuel tanks, carburettors and fuel lines have emerged since the policy’s implementation last month – five years ahead of schedule. A key issue with the policy’s premature rollout was that vehicle manufacturers had not yet optimised engines for E20 fuel, forcing car owners to use it in vehicles designed for E10 or lower ethanol blends.
Despite significant backlash, the Union government has claimed that it has not received a large number of verifiable complaints from vehicle manufacturers, automobile associations or consumer organisations about drastic reduction in mileage, slow pick-up and rusting of petrol tanks that could be attributable to E20 fuel.
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