E20 leads to marginal drop in mileage, but overall gains for nation outweigh it, say auto, oil industry

New Delhi, Aug 30 (PTI) Usage of 20 per cent ethanol-blended petrol (E20) on vehicles can lead to a marginal decline of 2-4 per cent in fuel efficiency but the overall gains by the nation outweigh the additional expenses incurred on fuel by individual customers, officials of automotive and petroleum industries, and testing agency ARAI said on Saturday.

Auto industry body Society of Indian Automobile Manufacturers (SIAM) also asserted that E20 fuel-related insurance and warranty claims issues are "misplaced" and asserted that vehicle manufacturers will "honour the warranty without any ifs and buts".

"The mileage related challenges, there is admittance, clearly, that (due to the) intrinsic nature of the fuel there is marginal drop, but it accrues the huge benefit to the nation, to the society, to the farmer, to the environment, to the exchequer and all of us," SIAM Executive Director PK Banerjee told reporters here in a press conference.

Refuting claims by customers that fuel efficiency has dropped by 20-50 per cent, he said, "It is all a misplaced misinformation campaign." Citing results of different tests, Banerjee said, "The range (of drop in mileage) we found was 2 to 4 per cent depending upon whatever vehicles we have tested." He noted that there is only 6 per cent less energy in E20 due to the intrinsic nature of the calorific value of the ethanol, which is 30 to 35 per cent lower compared to petrol, but added fuel efficiency is subject to various factors, including driving style, traffic and usage of air conditioners, among others.

When asked about issues on warranty and insurance due to usage of E20 fuel on non-E20 vehicles, Banerjee said, "The E20 fuel-related insurance and warranty, any claim, whoever is spreading is misplaced. There will be honouring of the warranty without any ifs and buts (by OEMS)." On the question of the impact of the usage of E20 fuel on vehicle engines, which are non-compliant with the latest fuel, He said that till date, "millions of vehicles are running and plying E20 for quite some time now, not a single vehicle breakdown has been reported".

Automotive Research Association of India (ARAI) Director Reji Mathai, citing two studies done in 2016 and 2021, stated that "in the testing we have found them not to have any adverse impact...they have been accepting the E20 fuel".

When asked for details of the reports, Mathai said it has been submitted to the "concerned authorities" but not made public due to the confidentiality of data of the OEMs involved.

Highlighting the benefits of ethanol blending in petrol fuel, Federation of Indian Petroleum Industry (FIPI) Advisor PS Ravi claimed it has helped in driving rural prosperity, helping farmers to earn more, with Rs 40,000 crore payments made for ethanol procurement made in 2025 alone.

He also said since 2014-15, 245 LMT of crude oil has been substituted and there have been savings of Rs 1.44 lakh on forex and in 2025, Rs 43,000 crore of forex savings are expected. It has also helped in reducing 763 LMT of carbon dioxide emissions.

Ravi further said ethanol blending has also reduced crude import dependence, shielding India from global oil price shocks and supply disruptions and it gives India geopolitical leverage by positioning itself as a leader in sustainable fuels and a model for other developing economies.

On the issue of consumers having to spend more on fuels due to the drop in efficiency, Toyota Kirloskar Motor Country Head and Executive Vice President - Corporate Affairs and Governance, Vikram Gulati said the benefit of ethanol blending has to be seen for a wider perspective such as saving on forex that has a direct impact on India's current account deficit, and subsequently on the economy.

"The money that would have been sent outside (for importing crude) is now going to farmers, who will now be economically better. They will be able to spend more and they will contribute to the economy," Gulati noted.

Besides, he asserted that ethanol blending is "enabling the entire country to move towards sustainability in a very in a very smooth manner, without disruption either to our economy, and best of all, creating a future which is truly self reliant, not only from a point of view of energy, but also from a point of view of technology and raw materials." PTI RKL MSS MR