PM Modi Says Ethanol Blending Helped Save Import Of 4.5 Crore Oil Barrels. How Does It Work?

Last Updated:March 23, 2026, 14:58 IST

Ethanol blending is the process of mixing ethanol (a type of alcohol made from crops like sugarcane, maize, or grains) with petrol to be used as fuel in vehicles

Prime Minister Narendra Modi, addressing Parliament on the West Asia war on Monday, credited ethanol blending with helping India tide over the energy crisis arising from disruptions in the Strait of Hormuz.

“In this time of crisis, another preparation of the country is proving very useful. In the last 10-11 years, unprecedented work has been done on ethanol production and blending. A decade ago, the country had a capacity of only one per cent ethanol blending. Today, we are close to achieving 20 per cent ethanol blending in petrol. Due to this, in the last year, we have had to import about 4.5 crore barrels less oil," he told Parliament.

The prime minister’s assurance has once again brought the focus on ethanol blending and its significance at a time when global energy supplies have been affected.

What Is Ethanol Blending?

Ethanol blending is the process of mixing ethanol (a type of alcohol made from crops like sugarcane, maize, or grains) with petrol to be used as fuel in vehicles. For example, E10 = 10 per cent ethanol + 90 per cent petrol and E20 = 20 per cent ethanol + 80 per cent petrol.

India is currently moving toward E20 fuel as part of its energy strategy.

Why Is Ethanol Blended With Petrol?

The most significant reason, especially as the war rages in the Middle East, is the reduction in oil imports. India imports most of its crude oil and ethanol (made domestically) helps cut dependence.

Ethanol also burns cleaner than petrol, reducing carbon monoxide and emissions. Given its origin from crops like sugarcane (molasses) and maize, it gives farmers an additional source of income.

Using locally produced fuel makes the country less vulnerable to global oil shocks, such as the one staring the world today, and helps keep inflation in check.

India’s Push

What began as a gradual policy shift in the country has now turned into a nationwide transition, with E20 petrol (20 per cent ethanol blend) being rolled out across India in 2026.

At the core of the policy is the Ethanol Blended Petrol (EBP) Programme, which aims to mix ethanol with petrol to reduce dependence on crude oil.

According to Financial Times, India set a target of 20 per cent blending (E20) by 2030 and later advanced it to 2025-26. The country achieved this target in 2025, five years ahead of schedule. From April 1 this year, E20 petrol will be rolled out nationwide. This marks a major shift from earlier fuels like E10 (10 per cent ethanol).

What Are The Challenges?

The biggest impediment remains vehicle compatibility. Reuters reported that older vehicles (pre-2020 models) may face lower mileage and wear and tear issues due to the use of ethanol.

What has also been discussed is the food vs fuel debate as using crops like sugarcane and rice raises concerns about food security and water usage.

Then there is the concern about supply volatility. Ethanol production depends on agricultural output, which can be affected by weather (e.g., droughts, El Niño).

Recent reports also suggest shifts between sugar-based ethanol and grain-based ethanol, leading to tensions within the sector.

Association’s Offer

Given the current status of the war, the All India Distillers’ Association (AIDA) has offered to supply ethanol blends exceeding 20 per cent with petrol, saying the move could proportionally reduce India’s dependence on imported crude oil.

In a letter to Union Minister for Road Transport and Highways Nitin Gadkari, AIDA Deputy Director General Bharati Balaji said the ethanol industry was prepared to go beyond the E20 target already achieved by the country.

The association has demanded that the government raise the ethanol blending mandate gradually from 20 to 30 per cent.

News explainers PM Modi Says Ethanol Blending Helped Save Import Of 4.5 Crore Oil Barrels. How Does It Work?

Read More