The step may benefit the country’s farmers and reduce crude imports, but one question still lingers: why should customers bear the burden of mileage loss and face uncertainty over warranties and insurance?
31 Aug 2025 | 3501 Views | By Yukta Mudgal
Confusion, speculations, and lack of clarity—that’s what every petrol user in India faces with the use of E20 fuel today. It has become a talking point at petrol pumps, on social media, and among cab drivers. But has any engine actually broken down? The answer is no.
Still, questions ...
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Confusion, speculations, and lack of clarity—that’s what every petrol user in India faces with the use of E20 fuel today. It has become a talking point at petrol pumps, on social media, and among cab drivers. But has any engine actually broken down? The answer is no.
Still, questions about mileage drop, warranties, and insurance remain unresolved. To address these concerns, around 13 senior executives from OEMs, oil companies, and testing agency ARAI came together on a panel this week.
The executives stressed that customers can safely use E20 and highlighted how the shift supports the country’s economy, benefits farmers, and strengthens energy independence. Their assurances came just days ahead of a Supreme Court hearing on September 1, following a PIL filed by an advocate.
Officials highlighted that 60–70% of ethanol procurement value flows directly to farmers. In 2014, India bought just 38 crore litres of ethanol for blending. This year, the figure is expected to touch 1,100–1,200 crore litres, worth nearly Rs 80,000–85,000 crore.
“In the last 3–4 years alone, about Rs 40,000 crore has been invested in new distilleries, entirely indigenous equipment,” said P.S. Ravi, Director, Federation of Indian Petroleum Industry (FIPI).
No Impact on Warranty
The step may benefit the country’s farmers and reduce crude imports, but one question still lingers: why should customers bear the burden of mileage loss and face uncertainty over warranties and insurance? Offering assurance, Prashant Kumar Banerjee, Executive Director of the Society of Indian Automobile Manufacturers (SIAM), said, “There will not be any warranty-related changes. Whatever warranty is committed by OEMs will be fully honored for E20 usage,” adding that insurance claims too would remain unaffected. He later clarified that this assurance holds true irrespective of what is stated in a vehicle’s user manual.
The Automotive Research Association of India (ARAI) has conducted controlled tests on vehicles ranging from 2005 to 2021, spanning both two- and four-wheelers. However, the report has not been made public and puts questions on transparency. Officials said that while summaries are available, full reports contain OEM-sensitive data under non-disclosure agreements. They assured to explore releasing more consumer-friendly versions.
The senior executives said results showed no cases of drivability issues, engine damage, or breakdowns when running on E20. "Not a single case of vehicle breakdown or engine failure has been reported in the market, even as E20 fuel has been in use across all segments, categories, and sections of society for quite some time, including in older vehicles," said Banerjee.
Mileage Concerns and Clarifications
Mileage remains a sticking point. Ethanol has a lower calorific value than petrol, leading to some loss in fuel economy. Some assessments suggest a 2%–7% efficiency dip in older vehicles. Consumers, however, often report larger declines—up to 15–20%.
Officials countered that such figures are exaggerated but admitted that efficiency losses are typically between 2–6%. Much depends on driving style, road conditions, and vehicle upkeep.
“Why No Choice?”
A flashpoint in the discussion was consumer demand for “fuel choice" on why India discontinued parallel supply of E0 (pure petrol) and E10, unlike Brazil where multiple blends coexist.
Oil company executives said that logistics and economics made a single national grade more viable. ““As oil companies, we assessed whether we were ready to supply a uniform, single grade of E20 fuel across the country. Until then, multiple fuel options were available.
Once studies clearly showed that there would be no significant impact, and with availability ensured, we shifted to E20 as the single grade fuel, only in the last six to eight months,” An IOCL official said.
Farmers and Forex: The Bigger Picture
Behind the technical debates lies the larger narrative: ethanol blending as an instrument of rural prosperity and energy security.
The foreign exchange savings are equally striking. Officials estimated that ethanol blending has substituted 245 lakh metric tonnes of crude oil so far, saving nearly Rs 1.4 lakh crore in import costs.
Beyond economics, ethanol is considered carbon neutral because plants absorb the CO2 released during combustion. Studies suggest E-20 gives lowers carbon emissions by approximately 30% as compared to E10 fuel. Its higher octane rating also supports cleaner combustion, reducing local pollutants.
However, one question still looms: what happens to the engines of older vehicles when the government pushes for E27 by 2027?