Why is India’s ethanol-blended fuel policy facing consumer backlash?

Why is India’s ethanol-blended fuel policy facing consumer backlash?

Motorists have posted videos of stalled vehicles and lower mileage, but experts say ageing vehicle parts, poor maintenance and contaminated petrol could also be reasons for the problems.

SINGAPORE: Earlier this month, Indian YouTuber Manish Kashyap posted a video in which he alleged that India’s new fuel blend - with increased ethanol - had caused his Toyota Innova multi-purpose vehicle to break down.

The automaker denied the allegations and pointed to fuel contamination. A criminal case has been registered against Kashyap with the Nagpur Cyber Police for allegedly spreading misinformation, local media reported.

The incident sparked a wave of similar claims by motorists on social media. Some displayed fuel drained from their tanks that had visibly separated layers and claimed that the blend had damaged their vehicles.

India’s decision to up the amount of ethanol in petrol to 20 per cent last year, and to make that fuel blend the standard choice for motorists since April has caused a furore in the country, transforming what was once a technical energy policy into a heated consumer controversy.

The government has promoted the fuel, called E20, to reduce its dependence on imported crude oil, increase farmers’ earnings and cut vehicle emissions. Ethanol is derived mainly from sugarcane and grains, which the country produces domestically.

The move, originally targeted for 2030, came five years ahead of schedule. Previously, the maximum amount of ethanol in petrol in the country was 10 per cent.

The accelerated transition has triggered concerns over mileage losses, compatibility with older vehicles and the limited availability of pure petrol and E10 variants, motorists and mechanics told CNA.

One motorist from Pune, who requested anonymity, told CNA that his wife’s scooter repeatedly stalled and eventually would not restart. The service centre told him that E20 was aggravating an existing fuel-filter issue, he said.

Others reported lower mileage and anxiety over how E20 fuel could affect older vehicles.

“I am worried, definitely, because my car is almost 12 years old,” said Denzil Dmello, a 44-year-old IT services executive from Mumbai who owns a car and a scooter.

Gaurav Deshpande, a mechanic and car workshop owner in Thane, a city near Mumbai, told CNA he had seen cars stall. “Two vehicles came into my workshop with fuel-pump problems,” he added.

However, he said such failures could stem from contaminants entering fuel when stored at petrol stations, rather than from the E20 blend itself.

Experts agreed, but said India could ease the transition by improving fuel storage standards, preserving consumer choice and learning from countries that introduced higher ethanol blends gradually alongside compatible vehicles and multiple fuel options.

WHAT’S BEHIND INDIA’S E20 POLICY?

India advanced the rollout of a 20-per-cent ethanol blend to reduce its crude oil import bill and improve its energy security.

This came at a time when the United States and Israel’s war against Iran sent oil prices soaring.

India’s crude oil import bill increased by 60 per cent to US$49.8 billion in the April-to-June quarter of 2026 compared with the same period a year earlier, according to government data. The country is the world’s third-largest oil importer after China and the US.

The government estimated that the E20 policy would lead to foreign-exchange savings of 430 billion rupees (US$4.46 billion) and contribute 400 billion rupees (US$4.15 billion) to the earnings of domestic farmers during the year, according to 2025 data from India’s Ministry of Petroleum and Natural Gas.

In the 11 years until July 2025, India’s ethanol-blending programme saved more than 1.44 trillion rupees in foreign exchange, replaced about 24.5 million tonnes of crude oil and cut an estimated 73.6 million tonnes of carbon emissions - equivalent to planting 300 million trees - according to government data.

WHAT ARE THE CONCERNS?

Only about 20 per cent of new petrol vehicles sold in India in the last 15 years were E20-compliant, Thomson Reuters Foundation found last year in its analysis of government and industry data.

While vehicle manufacturers have introduced models with E20-compatible fuel systems since April 2023, more than 60 per cent of India’s vehicles on the road predate 2023, according to estimates based on Indian automobile industry data.

Mechanics and automobile experts told CNA the concerns largely centre around older vehicles.

Vehicles designed for lower ethanol blends could face faster wear of some fuel-system components and reduced performance with E20 fuel, they said, although some studies have pointed to a lack of evidence to back this up.

“People are worried about parts getting worn out. That is a possibility, but it takes a long time. The damage is limited to the fuel-delivery system - rubbers, seals, hoses and, in some cases, the fuel pump,” said Hormazd Sorabjee, an automobile expert and editor of Autocar India.

Sorabjee said older vehicles may face some problems over time because of E20 fuel, but would not suffer major or immediate damage that would cause sudden engine failure.

A study released on Jul 14 by researchers at the Indian Institute of Technology (IIT) Kanpur found no evidence that E20 damages the engines of either new or older vehicles.

“There has certainly been an increase in questions from customers, but that does not automatically mean there has been a corresponding increase in E20-related technical failures,” said Saharsh Damani, chief executive of the Federation of Automobile Dealers Association (FADA).

“We have also seen cases where initial claims blaming E20 were later found to have been caused by unrelated mechanical faults.”

He said several factors could be involved, including fuel quality, isolated adulteration, overdue maintenance, ageing components in older vehicles or entirely unrelated mechanical issues.

“Every case deserves a pro