E20 Fuel Can't Be Cheaper Than Pure Petrol. Centre Explains Why

New Delhi:

The Centre has defended the push for using E20 or 20 per cent ethanol-blended petrol across the country and clarified that consumers would not see lower prices at fuel stations despite the integration of domestically produced biofuels.

The government said while the E20 transition shields the larger economy from international oil shocks, its production costs are tied to guaranteed farmer payouts rather than global crude fluctuations.

On the recurring public questions over pricing, the Ministry of Petroleum and Natural Gas said ethanol is bought from farmers at fixed and protected rates to support the agricultural sector. For example, maize-based ethanol is procured at around Rs 71.86 per litre.

Because these domestic procurement prices remain steady, E20 actually costs more to manufacture than conventional pure petrol when global crude oil trades around $70 a barrel. The ministry highlighted a visible retail cost advantage for E20 would only kick in if global crude prices spike drastically to the $120-$130 per barrel range.