E20 fuel may lead to 3-5% mileage hit in ‘some’ vehicles, Govt. admits as it defends blending
The Indian government has acknowledged that E20 ethanol-blended fuel can reduce vehicle mileage by 3-5%. Officials defend the policy by highlighting the fuel's environmental benefits and the need to provide fair compensation to farmers.
Why it matters
This addresses the trade-off between national agricultural support policies and consumer-facing fuel efficiency concerns in the automotive sector.
While admitting that E20 blended fuel could result in a 3-5% reduction in the fuel economy of “some vehicles”, the government has also sought to explain why the blended fuel is not currently cheaper than pure petrol or fuel with lower ethanol levels.
The core reason, it said, was because the government is seeking to compensate farmers adequately, and so E20 fuel becomes relatively more expensive to produce than pure petrol whenever oil prices fall to around $70 a barrel.
This statement on Friday (July 10, 2026), in the form of a frequently asked questions (FAQ) document by the Ministry of Petroleum and Natural Gas, comes at a time when critics are questioning why fuel with 20% ethanol is not cheaper than pure petrol or fuel with 10% ethanol.
The document added that E20 fuel has a higher-octane rating and provides several other vehicular and emission-related advantages over unblended fuel.
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