Congress vs Centre over E20: consumers paying more or import savings?
The Congress party on Wednesday accused the Central government of tilting the benefits of E20 petrol — a blend of 20% ethanol with petrol — towards ethanol producers while leaving consumers with higher fuel costs. The party claimed that motorists are paying more despite earlier assurances that ethanol blending would make fuel cheaper.
Congress leader Jairam Ramesh said that since March 2025, regular fuel stations across the country have been supplying "practically only E20 petrol." He referred to earlier statements by Union Road Transport and Highways Minister Nitin Gadkari, who had said that ethanol blending would bring diesel prices down to Rs 50 per litre and provide a petrol alternative at Rs 55 per litre. Ramesh said no such reduction has materialised.
"On the contrary, according to an independent analysis, between April 2023 and March 2026, consumers collectively spent an additional approximately ₹88,234 crore to compensate for the lower mileage from ethanol-blended fuel," Ramesh wrote on X.
He further argued that the government could have reduced the retail price of E20 petrol to offset the lower fuel efficiency. He noted that NITI Aayog's Ethanol Roadmap had recommended financial and tax incentives for E10 and E20 fuels to compensate consumers. Instead, Ramesh alleged, the government approved subsidies of more than Rs 4,000 crore for ethanol producers.
"E20 has stripped the average middle-class Indian of options, imposed higher fuel costs on them, and placed an extra burden on the very vehicle they saved for years to buy. If any segment has benefited the most from E20, it is the ethanol producers," Ramesh said.
The government, however, has defended the ethanol blending programme, reiterating that E20 is safe for vehicles. It argues that blending helps reduce India's dependence on imported crude oil and supports farmers by creating demand for sugarcane and other biomass. Ethanol blending is also seen as a step towards lower vehicular emissions.
India has been pushing for increased ethanol blending as part of its energy security and climate goals. The government has targeted 20% ethanol blending in petrol by 2025-26, and several automakers have confirmed that their vehicles are E20-compliant. However, experts point out that ethanol has a lower energy density than petrol, which can result in a fuel economy loss of around 6-8%. This loss is what the Congress has highlighted as a cause of higher consumer spending.
The Congress party's allegations have not yet been officially responded to by the government. The figures cited by Ramesh are from an analysis the party described as independent, but they have not been verified by this publication. The debate underscores the tension between environmental goals, industrial interests, and consumer affordability.
