The Indian government is reportedly evaluating a proposal to reintroduce E10 fuel, a blend of 10% ethanol and 90% petrol, specifically targeting older vehicles. This consideration comes amidst growing pressure from consumers and taxi operators whose vehicles are not compatible with the E20 blend currently mandated across the country.
Chief Economic Adviser V Anantha Nageswaran initially suggested the comeback of E10 for vehicles manufactured before April 2023, which number over 30 crore. Following this, the Ministry of Petroleum and Natural Gas is said to be in discussions with state-run oil marketing companies like Indian Oil, Bharat Petroleum, and Hindustan Petroleum regarding the potential rollout.
Utilizing Premium Fuel Infrastructure
The proposed method for reintroducing E10 involves leveraging the existing infrastructure of premium fuel dispensers. These include pumps for higher-octane fuels such as XP95, Speed, and Power95. Premium fuels are typically sold in smaller volumes at a higher price due to specialized additives.
This approach makes logistical sense for several reasons. Firstly, the Research Octane Number (RON) of E20 petrol now sold across India has increased to 95 from approximately 88 previously. This reduces the distinct performance advantage once offered by premium fuels. Secondly, the infrastructure for premium fuels was initially expected to be utilized for flex-fuel vehicles, but sales in that segment have seen little progress, leaving these dispensing points underutilized.
Government's Previous Stance and Challenges
Reports of E10's potential return mark a shift from the government's previous official position. In a statement on July 10, the Ministry of Petroleum and Natural Gas had voiced concerns that reverting to E10 would jeopardize substantial investments in ethanol production and associated infrastructure. Public sector banks have financed nearly ₹1 lakh crore annually in dedicated ethanol plants, distilleries, storage facilities, and logistics networks to meet India's E20 blending targets.
The ministry also highlighted the significant logistical challenges of maintaining multiple grades of petrol (pure petrol, E10, and E20) across India's extensive fuel distribution network of over one lakh retail outlets. Such a system, it argued, would complicate inventory management, increase handling costs, and reduce operational efficiency.
E20 Mandate and Global Context
The E20 mandate was primarily introduced to reduce India's fuel import bill and boost farmers' incomes by increasing demand for ethanol. However, the incompatibility of millions of older vehicles with E20 remains a significant issue for consumers.
Internationally, ethanol blending varies. While Brazil mandates E30, India is one of the few large nations with an E20 mandate. In contrast, E10 is the standard blend sold at gas stations in the United States and is common across most of the European Union. Japan plans to introduce nationwide E10 blending by 2030, while China and Russia currently have no such mandates.