The use of E20 petrol resulted in savings of nearly ₹30 per litre for consumers at the height of the global crude oil crisis, the petroleum ministry said in an official release issued on Friday.
It also said that petrol prices in Delhi could have risen to ₹125 per litre if oil marketing companies had not mixed ethanol with petrol when global crude oil prices climbed to nearly US$135 per barrel.
The clarification from the petroleum ministry comes as the Centre introduced the use of E20 petrol, which contains 20 per cent ethanol and 80 per cent petrol, a move that has faced criticism from opposition parties and consumer groups.
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₹30 per litre in savings, says govt
The government said the use of E20 petrol not only helped prevent a steeper increase in retail fuel prices during the surge in crude oil prices but also resulted in savings of nearly ₹30 per litre for consumers at the height of the crisis.
The ministry also dismissed claims that foodgrain meant for poor families was being diverted for ethanol production, or that subsidised rice supplied by the food corporation of India (FCI) was being used for the programme.
“The purpose of ethanol blending is to reduce India’s dependence on imported crude oil, which still meets nearly 88 per cent of the country’s oil requirement. It is an insurance policy against global oil shocks and not a day-to-day price competition,” the release said.
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Petrol prices in Delhi would have climbed to ₹125/litre: Govt
The petroleum ministry said in the release that the ethanol-blended petrol (EBP) programme aims to improve “India’s energy security, reduce dependence on imported crude oil and support farmers while safeguarding food security”.
It said that when the Indian crude oil basket touched around US$135 per barrel, the estimated price of petrol in Delhi, without ethanol blending, would have been close to ₹125 per litre.
The ministry said consumers instead paid ₹94.77 per litre because one-fifth of every litre consisted of ethanol produced within the country and purchased at fixed prices agreed in advance.
Outrage over ethanol-blended petrol
The rollout of E20 petrol, made up of 80 per cent petrol and 20 per cent ethanol, has received backlash from opposition parties and several consumer groups, who have expressed concern about its effect on older vehicles not built to run on fuel containing 20 per cent ethanol.
Those opposing the policy have questioned whether every vehicle can safely use E20 fuel. They have also raised concerns about lower fuel efficiency and increased maintenance costs, and asked who would be responsible if engine or fuel-system issues occur.
The Aam Aadmi Party (AAP) began a campaign against the policy on Saturday. Meanwhile, transport unions in Delhi are planning a protest march against the programme.
AAP national convenor and former Delhi chief minister Arvind Kejriwal, while addressing the ‘National Town Hall Against E20’ at the Constitution Club of India in Delhi on Saturday, demanded that petrol pumps offer both E20 and pure petrol, E20 be sold at a lower price than pure petrol, and the price of petrol be brought below ₹84/litre.
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