Petroleum and Natural Gas Minister Hardeep Singh Puri announced on Wednesday that the government is contemplating increasing ethanol blending in petrol beyond the existing target of 20 per cent soon.
A committee under the NITI Aayog has been constituted to evaluate the feasibility of this move, he said while addressing the Advantage Assam 2.0 business summit in Guwahati.
"We will be looking at more than 20 per cent blending of biofuel soon. Already a NITI Aayog group has been set up and they are looking into it," Puri stated .
He further noted that India has already achieved a 19.6 per cent ethanol blend in petrol.
Puri also reaffirmed the commitment of fossil fuel production companies to achieving net-zero emissions by 2045, despite the developmental challenges India faces.
The decision aligns with the Modi government’s broader fuel-blending programme aimed at curtailing India's reliance on imported petroleum.
The country is the world’s third-largest oil importer, and blending ethanol with petrol is seen as a crucial strategy to mitigate dependence on overseas oil supplies.
Last month, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved an increase in the price of ethanol procured from sugar mills by state-run petroleum retailers.
Also read: Ethanol in Petrol exceeds 13%, Govt sets 20% by 2025
The move is expected to bolster the fuel-blending programme and ensure farmers receive higher prices to offset cultivation costs.
The administered price of ethanol derived from C-heavy molasses, a by-product of cane crushing, has been raised to ₹57.97 per litre for the ethanol supply year 2024-25 (November 1, 2024, to October 31, 2025), up from ₹56.58 per litre, reflecting a 2.5 per cent increase.
According to a Cabinet statement, ethanol blending over the past decade (2014-15 to 2023-24) has led to estimated foreign exchange savings of USD 14.4 billion.
India has steadily advanced its ethanol-blending targets. On June 5, 2021, Prime Minister Modi announced the acceleration of the goal for achieving 20 per cent ethanol blending in petrol to 2025-26, four years ahead of the previously planned timeline of 2029-30.
The government considers ethanol projects viable due to assured long-term procurement commitments.
Under the scheme, oil marketing companies will continue purchasing ethanol for the next decade, ensuring a stable market for producers and farmers alike.
India's ethanol blending programme primarily targets petrol used in light-duty vehicles, including many commercial vehicles such as taxis and delivery vans.
As of December 2024, the country achieved an 18.2% ethanol blend in petrol, with plans to reach 20% by 2025.
Regarding diesel, which fuels a significant portion of heavy-duty commercial vehicles, the government is exploring ethanol blending options.
Research into a 15% ethanol blend in diesel is in advanced stages, aiming to reduce dependence on traditional diesel fuel. However, as of now, no official programme has been launched for ethanol blending in diesel.
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