E20 Blending Program Costs More Per Litre Than Crude Oil, Sparks Scam Concerns

New Delhi: India’s oil marketing companies reportedly procured 705.43 crore litres of ethanol at an average Rs 70.27 per litre for the E20 blending program from April 2025 to June 2026. Notably, this exceeds  the cost of crude oil used for petrol, as the government currently buys crude oil for Rs 45 per litre, raising questions regarding the benefits of the shift through E20 rollout.

The Ministry of Petroleum and Natural Gas has said that E20 petrol is currently costlier to produce than pure petrol at prevailing global crude oil prices. The ministry then defended the change noting that it can help shield Indian consumers from global oil price volatility while strengthening the country’s long-term energy security.

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Union Minister Suresh Gopi said E20 could beat pure petrol costs if crude oil prices surge to $120-130 per barrel. The Ministry argued that continued ethanol blending is expected to improve India’s energy security by reducing crude oil imports, lowering foreign exchange outgo, providing greater fuel price stability and increasing incomes for farmers.

Ethanol Blended Petrol Programme has already saved more than Rs 1.97 lakh crore in foreign exchange, substituted nearly 316 lakh metric tonnes of crude oil, the ministry further added.

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