'Restore Fuel With Lower Ethanol Blends For Older Vehicles': CEA Nageswaran Amid E20 Petrol Row

India's Chief Economic Adviser (CEA) V Anantha Nageswaran has suggested reintroducing a fuel variant with low ethanol blend for older vehicles, to calm "consumer concerns". This is the first time a senior government official has called for wider fuel options amid growing consumer anger against the government's 'E20-only policy'.

In an opinion piece for The Indian Express co-written with Department of Economic Affairs consultant Akash Poojari, the CEA said that a rollback of the E20 policy is not a solution to consumer concerns, but providing them with options to buy fuel with lower ethanol blend.

India last year rolled out E20 petrol with 20% ethanol blend, and since April 1, 2025, it is the only fuel available at petrol pumps across the country.

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"Restoring a lower blend at the pumps, say, E10, alongside the option to buy E20, would calm most public concern," Nageswaran wrote in The Indian Express.

According to Nageswaran and Poojari, India possesses roughly 75 to 80 million pre-BS4 two-wheelers equipped with carburettors. These systems cannot compensate for the higher oxygen content in ethanol blends, and older rubber components may degrade upon contact with ethanol.

While retrofitting these older motorcycles with ethanol-resistant seals is technically feasible, Nageswaran noted it would be an expensive and time-consuming process given the scale of the fleet. The CEA suggested that offering a lower ethanol blend at petrol pumps could resolve compatibility issues for the ageing vehicle fleet without requiring the complete abandonment of the E20 initiative.

"India has roughly 75 to 80 million older two-wheelers. Older rubber seals that are not rated for ethanol are a separate problem. Retrofitting those seals, that way will take years," the opinion piece said, adding, "Govt should protect the existing fleet while the retrofit programme catches up."

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The government, however, has dismissed the idea of providing multiple fuel grades (like E10, E20, and pure petrol simultaneously) due to logistical challenges and costs. While acknowledging that E10-optimised vehicles might experience a 3-5 per cent drop in efficiency when using E20, officials have stated there is no conclusive proof that E20 causes significant engine damage.

The governmemt's move has stoked widespread concerns about vehicular performance and damage to auto parts, with many car owners venting their frustrations on social media and calling on the government to make lower ethanol-blended fuel variants available.

Quesions Raised On Govt's Plan For More Ethanol Blend

The opinion piece further questioned the trajectory of ethanol blending, warning that moving to E27 or E30 levels introduces a new set of risks where fuel production might actively displace food supplies.

They pointed out a shift in feedstock sources, with maize now accounting for approximately half of India's ethanol supply. Because maize is an essential crop like soybean, groundnut, and mustard, this shift has significant agricultural implications.

Water scarcity is a major concern as well. The authors argued that policies must distinguish between "green water" (naturally occurring rainfall) and "blue water" (irrigation from rivers, canals, and groundwater).

Since sugarcane cultivation in states like Maharashtra and Karnataka already heavily consumes limited blue water resources, regulations should focus on water management rather than just targeting ethanol-blending percentages.

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The authors also noted that the environmental benefits of increasing ethanol beyond E20 remain unproven, as life-cycle analyses of grain cultivation and processing do not consistently demonstrate that ethanol is cleaner than available alternatives.

Despite these criticisms, the duo recognised that the ethanol programme has provided tangible benefits, including clearing overdue payments to sugarcane farmers, boosting rural income, establishing a reliable market for ethanol, and helping manage sugar surpluses.