India launches flex fuel; E85 petrol will be ₹20 cheaper than regular fuel | Today’s news
New Delhi: State-run oil marketing companies (OMCs) on Friday launched high-ethanol blend petrol at a price of approx. ₹20 per liter lower than conventional fuel as the government seeks to reduce annual oil imports of $120 billion and tap growing production capacity in the domestic ethanol sector.
According to Hardeep Singh Puri, Union Minister for Petroleum and Natural Gas, about 48 public sector OMC retail outlets in the country currently offer this cleaner fuel. The government plans to expand it to 500 retail outlets by December, to around 5,000 retail outlets by December 2027 and increase the overall ethanol blending level in India to nearly 26 per cent by 2030-31. The country currently has about 100,000 gas stations, of which about 90,000 are state-owned.
“I think we’ve consciously structured the prices to ensure that consumers are adequately compensated by producing about E85 ₹20 per liter cheaper than E20,” Puri said at the launch of E85 petrol at Indian Oil Corp. Ltd’s retail outlet in the national capital.
The lower price can be attributed to the lower calorific value of the new variant compared to regular E20 gasoline. At the time of launch in the national capital, the fuel price was at ₹82.12 liters.
Noting that all existing vehicles compatible with E20 gasoline will continue to receive regular fuel and there will be no restriction on it, Puri said: “E85 is a different category. For fuel tanks, the board will be very clear that only for E85-compliant vehicles. You buy E85 because you want to help reduce fuel import bills, save the environment and improve farmers’ incomes.”
The minister said several countries, notably Brazil, have successfully adopted flex-fuel vehicles.
The minister also noted that the push for ethanol has led to an increase in production capacity to about 1,900 million liters of ethanol against the requirement of about 1,150 million liters to meet the E20 gasoline blending mandate.
He highlighted that ethanol blending has increased from 1.53% in 2014 to 20% today, reaching the target five years ahead of schedule, saying it has helped save more than ₹1.84 trillion in foreign currency and replaced nearly 302,000,000 metric tons of oil imports.
Mint previously announced that the center is preparing a broader policy push to allow the adoption of flex-fuel vehicles that can run on ethanol blends up to E85.
The launch comes at a time when carmakers including Maruti Suzuki India Ltd and Hero MotoCorp Ltd have introduced flex-fuel variants of their best-selling cars WagonR and Splendor.
The push for flex-fuel vehicles is gaining momentum as India seeks to reduce its dependence on imported crude oil. The country imports nearly 90% of its oil needs, worth more than $120 billion a year — much of it from West Asia via the Strait of Hormuz, which is effectively closed because of the war in Iran. Global oil prices have remained volatile amid the conflict, briefly above $100 a barrel before falling after the ceasefire, although the risk of further rises remains.
