Petroleum and Natural Gas Minister Hardeep Singh Puri on Friday said India’s ethanol blending programme has played a key role in protecting consumers from rising global crude oil prices by reducing the country’s dependence on imported fuel.
Speaking to Times Now and in a series of posts on X, Puri said India has been able to maintain relatively low petrol prices because nearly one-fifth of the fuel sold in the country now contains domestically produced ethanol purchased from farmers at fixed prices throughout the year.
His remarks came as crude oil prices climbed following the conflict in the Middle East, leading to higher fuel prices in many countries. Puri said India’s reliance on ethanol has reduced its exposure to fluctuations in Brent crude prices, which have ranged between $68 and $128 per barrel in recent months.
The minister also said the government has shifted ethanol production towards maize from water-intensive crops such as sugarcane and rice. According to him, maize now contributes nearly 35% of the country’s ethanol production, helping conserve water while increasing farmers’ incomes.
The Petroleum and Natural Gas Ministry said the ethanol blending programme has enabled India to record one of the lowest increases in retail fuel prices among major economies over the past four years despite volatility in international oil markets.
Responding to questions over why E20 petrol is not priced lower than conventional petrol, the ministry said the comparison overlooks the government’s policy of ensuring remunerative prices for farmers supplying ethanol.
According to the ministry, maize-based ethanol is currently procured at around Rs 71.86 per litre, excluding GST, transportation, storage and depot handling costs.
It said producing E20 fuel is costlier than conventional petrol when crude oil prices are around $70 per barrel. However, ethanol becomes the more economical option when crude prices rise to $120-130 per barrel.
The ministry said nearly 20% of every litre of petrol sold in India now consists of domestically produced ethanol, whose procurement price remains fixed and is insulated from daily fluctuations in Brent crude prices, geopolitical tensions and disruptions in global shipping.
It said the objective of ethanol blending is to improve India’s energy security by reducing dependence on imported crude oil rather than lowering petrol prices on any given day.
Meanwhile, according to an Economic Times report, state-run oil marketing companies incurred losses of nearly Rs 75,000 crore during the first quarter due to delayed fuel price revisions.
