All About Ethanol Blending in India: Who Pays, Who Gains, and What Happens to Your Car

India's fuel pumps are undergoing one of the decade's biggest transitions. The country's Ethanol Blended Petrol (EBP) programme has moved from a pilot stage to a nationwide scale-up, with average blending touching around 19% in Ethanol Supply Year (ESY) 2024–25 and a national target of E20 (20% ethanol in petrol) by ESY 2025–26.

The Journey So Far

Over the past five years, blending has surged from 8.10% in ESY 2020–21 to 14.60% in ESY 2023–24, when 707.40 crore litre of ethanol was mixed with petrol [Ethanol Supply Year (ESY) is the specific annual period, usually from November to October, used for planning, procuring, and blending ethanol with petrol]. In the most recent ESY (November 2024 to October 2025), 1,022.4 crore litre of ethanol was blended across the country, achieving an average of 19.24%, almost at the E20 target. This was confirmed in a written reply by Suresh Gopi, Minister of State for Petroleum and Natural Gas, in the Rajya Sabha on December 8, 2025.

During the Annual General Meeting of the Indian Sugar and Bio-Energy Manufacturers Association (ISMA), Deepak Ballani, Director General, ISMA, told NDTV: “India has reached its target of E20 with skyrocket speed. The plan was to achieve 20% blending by 2030, but we have reached it five years ahead. What countries like Brazil took 20 years to achieve, we did in just 7–8 years.”

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Foreign Exchange Savings

Ethanol blending is also helping India save on foreign exchange (forex) by reducing its massive crude oil import bill. Hardeep Singh Puri, Minister of Petroleum and Natural Gas, told Parliament on December 4, 2025 that the country has saved ₹1,55,000 crore in forex over the past few years because of ethanol blending.

For ESY 2018–19, the approximate foreign exchange impact was ₹5,500 crore, which doubled to ₹10,100 crore in ESY 2021–21. Since then, forex savings have risen steadily, reaching ₹46,345 crore for the recent ESY.

Ethanol Scaling Worldwide

Despite these gains and producing 6.2 billion litres of ethanol in 2024, India still trails behind global leaders, the USA and Brazil, as per data provided by Toyota Kirloskar Motor.

• USA accounts for 52% of global ethanol production with 61.4 billion litres.
• Brazil follows with 33.2 billion litres (28.1%).
• India ranks third, ahead of China (4.5 bn L), Canada (1.8 bn L), and Thailand (1.4 bn L).

Ethanol Potential in India

According to Oil Marketing Companies (OMC) tenders for ESY 2025–26, India now has a surplus supply of ethanol that can be leveraged for greater benefits.

• Total demand: 1,350 crore litres (including 1,050 crore litres for EBP).
• Supply offered: 1,775 crore litres.
• Installed capacity: 1,900 crore litres.

This surplus is possible due to feedstock diversification, ensuring stable and sustainable supply:

• Maize: 46%
• FCI rice: 22%
• Sugarcane juice: 16%
• Remaining: 16%

Says Ballani, “IOCL has started a pilot project on ‘Rice-Parali' at Panipat. The cost of production is slightly higher, but the future lies in 2G ethanol from crop waste. Globally, the US has already moved to 3G ethanol made from algae grown in wastewater or seawater, avoiding food-vs-fuel conflicts.”

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State-Wise Distribution

The average ethanol blending in petrol for ESY 2024–25 (as of June 30, 2025) was 18.93% nationwide, as stated by Gopi in the Lok Sabha on July 31, 2025,

• Top states: Haryana (19.3%), West Bengal (19.28%), Himachal Pradesh (19.26%), Kerala (19.25%).
• Lowest: Andaman & Nicobar Islands (6.26%), Goa (16.15%), Ladakh (16.17%).

Is Ethanol-Blended Petrol Safe for Your Car?

On November 11, 2025, during the winter session of Parliament, Rajya Sabha MP PV Veettil Abdul Wahab asked Minister of Road Transport and Highways Nitin Gadkari about possible adverse effects of ethanol-blended petrol on vehicles. Gadkari stated in his written reply that “studies on E20 conducted by IOCL, SIAM, and ARAI suggest that vehicles have not shown any significant variations in performance, and no adverse impact on components is observed.”

Vehicles that are BS6 phase-2 compliant or marked with an E20 sticker can handle up to 20% ethanol blends. However, it may affect mileage, though experts say the reduction in fuel efficiency will be a minor 2-4%.