India’s ethanol-blended fuel push faces backlash as oil imports stay high

According to CNBC, India is expanding the use of alternative fuels, including ethanol from corn and biogas from animal waste, as rising oil prices and possible curbs on Russian supplies pressure the country’s energy security. The government has made 20% ethanol blending in petrol mandatory five years ahead of schedule and is planning to raise compressed biogas output, while local media reports say it is also considering 15% isobutanol in diesel.

The policy has drawn protests from the Indian Youth Congress, which staged a demonstration against the E20 ethanol-blended petrol plan in New Delhi. Indian automakers began making vehicles compliant with E20 after 2023, but owners of older cars may face higher costs, reduced mileage and compatibility issues, according to analysts and experts. The government has denied claims that blended fuel harms vehicles.

Sumit Ritolia, lead research analyst at Kpler, said India bought 2.6 million barrels of Russian oil a day in the first 15 days of this month, accounting for more than 50% of its crude imports. Pankaj Srivastava of Rystad Energy said ethanol blending has become one of India’s most effective crude oil substitution strategies and estimated the 20% mandate could save nearly $4 billion a year through 2030, or $6.4 billion in a high-price scenario.