New Delhi: As consumer clamour to bring back lower-ethanol petrol rises, the government is exploring whether branded fuels such as XP95, Speed and Power95 can be sold in an E10 formulation, three people aware of the discussions said. This would sidestep the need to build separate storage and dispensing infrastructure for E10 petrol, at a time when many buyers wary of regular E20 petrol are already turning to these high-octane fuels.
The Union petroleum ministry is discussing the matter with state-run oil marketing companies (OMCs) Indian Oil, Bharat Petroleum and Hindustan Petroleum, the people cited above said on the condition of anonymity.
The talks assume significance as consumer concerns about the negative impact of E20 petrol on older engines and mileage persist despite the government’s assurances, sparking calls to bring back E10, considered more suitable for older vehicles. Starting April 2023, all automakers started manufacturing only E20-compliant vehicles.
“Options are being looked at in order to offer the more appropriate E10 fuel for older vehicles and allay the consumer concerns,” one of the people said. “Octane 95, which comes at a premium, is among the options being considered to be offered as E10.”
A second person said the government and OMCs are also looking at the demand viability and customer acceptability for Octane 95 as E10, which would be a premium E10. “So, it is being looked at if a regular cheaper E10 would be more acceptable or an expensive premium E10,” the person added.
The talks are in the initial stages and a final decision is yet to be taken, they added.
Queries emailed to the spokespersons of petroleum and natural gas ministry, and state-run OMCs on Tuesday remained unanswered till press time.
Octane 95 or ‘branded’ petrol—XP95 from Indian Oil Corp, BPCL’s SPEED and HPCL’s power95—is priced at ₹110-115 per litre compared to ₹102 per litre in Delhi. But with consumers worried about E20’s impact on their vehicles, fuel pumps estimate that Octane 95 now accounts for about 15% of petrol sales by OMCs, compared to 4% in March, Mint reported earlier.
Currently, Octane 95 also contains E20 just like regular petrol, but it has additives including a chemical mixture that helps clean engine parts, improve fuel burning, prevent rust, and boost overall engine performance. It is available at 90,000 PSU petrol pumps.
Apart from these two variants, there is also the Octane 100 variant, which is mostly used for luxury vehicles and costs around ₹150-170 and has no ethanol but higher additive content. However, given its higher cost, a need has arisen to offer a cheaper variant for the consumers using older vehicles.
This new plan comes in the backdrop of chief economic adviser V. Anantha Nageswaran pitching to restore a lower-ethanol option. “Restoring a lower blend at the pumps, say, E10, alongside the option to buy E20, would calm most public concern,” he wrote in a recent column in The Indian Express.
The newspaper also reported on 19 August about early exploratory discussions within the government and the industry on whether E10 petrol can also be retailed for older vehicles alongside E20.
Fuel retailers say providing E10 through the Octane 95 petrol variant route is an easy fix.
“Providing ‘95 Octane’ branded fuels with 10% ethanol is quite easy for OMCs. No need to change tanks or delivery units,” said Monty Sehgal, national spokesperson for Federation of All India Petroleum Traders.
Prabhat Kumar Singh, president of the Bihar Petroleum Dealers Association (BPDA), said bringing back E10 as an independent fuel would require huge investment in infrastructure from the OMCs. Instead, following the call by the CEA, “roll out of E10-blended petrol can be done smoothly by utilising the existing infrastructure for Octane 95, which currently contains 20% ethanol”, Singh said.
“There is already a separate chamber at pumps for Octane95. If required, this can be used for E10. So, the concern of separate infrastructure also goes away,” said Prashant Sinha, owner of a petrol and CNG plant in Patna, Bihar.
Consumer choice
Others say all ethanol mixes should be available for purchase, and consumers should be given the power to choose which fuel to buy.
Amarender Reddy, president of the Telangana Petroleum Dealers Association, said consumers should be given all the options and in case there is an added cost that the pumps have to bear, government support should be provided for the infrastructure upgrade as these are policy decisions.
Ashim Sanyal, managing trustee of Consumer VOICE, said: “Consumers should have the freedom to choose fuel that is compatible with their vehicles, particularly older vehicles that may not be designed for higher ethanol blends.”
“If E10 is brought back, the government should ensure that it is widely available and clearly labelled at fuel stations so that consumers can make an informed choice,” Sanyal added. “The transition should not leave consumers bearing the cost of infrastructure or vehicle compatibility issues.”
However, the government has dismissed the possibility of retailing multiple mixes of ethanol.
“The suggestion that every petrol pump should stock pure petrol, E10 and E20 simultaneously also ignores the realities of India's fuel distribution network,” the petroleum and natural gas ministry said in a 10 July statement, and added that maintaining multiple grades of base petrol across this vast supply chain would create an enormous logistical challenge, increase handling costs, complicate inventory management and reduce operational efficiency.
“People often cite premium petrol as an example. That comparison is misplaced. Premium fuels are niche products sold in limited quantities at a significant price premium because specialised performance-enhancing additives are blended into them. They are not separate nationwide base fuel streams. Running parallel nationwide supply chains for pure petrol, E10 and E20 would be an entirely different proposition,” the MoPNG statement added.
In India, the ethanol blending programme commenced with a pilot in 2001, E5 was introduced in 2006, and although blending remained around 1.53% in 2013-14, it has since been increased progressively.