India is the third largest oil consumer in the world, but buys more than 85 percent of its crude oil requirement from abroad, hence the government has been emphasizing on mixing ethanol in petrol for the last few years. Ethanol is a biofuel made from sugarcane, corn and agricultural products, which is used by mixing it with petrol. The government is now promoting 20 percent ethanol mixed petrol i.e. E-20 across the country. According to Union Petroleum Minister Hardeep Singh Puri, India has so far saved foreign exchange worth about 19.3 billion dollars i.e. about Rs 1.6 lakh crore through ethanol blending. Let us understand India’s ethanol plan in 5 points.
What is India’s oil consumption?
Before understanding the actual need of ethanol, it is important to know how much petrol and diesel India consumes before ethanol. Although the consumption of petrol and diesel is continuously increasing in India. The biggest reasons for this are the rapidly increasing number of vehicles, urbanization and economic activities. Five years ago, India’s petrol consumption was around 30 million tonnes annually. Now it has increased to more than 4 crore tonnes. The demand for diesel is also continuously increasing. According to Investing.com and other websites, the consumption of petrol in India between the financial year 2022-23 to 2025-26 was about 154 million tonnes and the consumption of diesel was about 361 million tonnes, which clearly shows that the energy demand of the country is continuously increasing. According to recent data, India’s refining and consumption capacity has reached around 55-56 lakh barrels per day. Even a small increase in oil prices in the international market has a big impact on India’s import bill, which is why the government wants to reduce dependence on imported oil by mixing ethanol in petrol.
How much foreign exchange is India left and how much will it save in future?
The biggest advantage of ethanol blending has come in the form of foreign exchange savings. According to the government, by achieving about 20 percent ethanol blending, India has so far saved foreign exchange worth 19.3 billion dollars i.e. about Rs 1.6 lakh crore. The reason behind this is that the more ethanol is mixed in petrol, the less crude oil will have to be purchased from abroad. India imports more than 85 percent of its crude oil needs, hence tension in West Asia or rising prices in the international market has a direct impact on the Indian economy. The government believes that if the ethanol blending level is maintained stably at 20 per cent or above in the coming years, billions of dollars of additional foreign exchange can be saved every year. This will reduce the country’s import bill and also reduce pressure on the rupee.
What will be the benefit to farmers?
The ethanol program is being seen not only as an energy policy but also as an agricultural policy, mainly sugarcane, corn and some other agricultural products are used to make ethanol, this gives farmers an additional market to sell their produce. According to government data, more than $15 billion has been paid directly to farmers through the ethanol program over the past decade. Sugarcane farmers have especially benefited from this because their dues to sugar mills have reduced and payments have been made faster. Now the government is also promoting corn-based ethanol production. With this, maize producing farmers of many states of the country are also expected to get new demand and better prices, this is being considered as a new source of increasing income for the agricultural sector.
In which countries is this ethanol used, like Brazil and America?
India is not the first country to follow this path, many big countries of the world are already using ethanol in petrol. Brazil is considered the world’s largest example in terms of ethanol use. Many vehicles there also run on 100 percent ethanol i.e. E-100, flex-fuel vehicles are common in the country. Which can run on both petrol and ethanol, ethanol mixed petrol is also used extensively in the US, E-10 and E-15 petrol are generally available there, while in some vehicles up to E-85 is used. Apart from this, ethanol blending programs are also going on in countries like Canada, Thailand and Australia. India also aims to strengthen its energy security by learning from international experiences.
What questions are being raised regarding ethanol?
Although there are benefits of ethanol mixed petrol, many questions are also being raised regarding it. The biggest question is regarding the mileage, many vehicle owners claim that the mileage of the vehicles reduces slightly by using E-20 petrol. The government also believes that a slight decline is possible, although it says that it is not very much, apart from this, people are also complaining that their vehicles are getting spoiled by using ethanol based petrol.
The second biggest question is regarding old vehicles. New vehicles are being prepared according to E-20, but there may be some technical problems in the old models. For example, in the car which is of 2020, 21 model, people are saying that there is some problem with the engine. Mechanics are also pointing out that ethanol is affecting the engine of the vehicle.
The third issue is of water consumption, sugarcane is a crop which requires a lot of water, critics say that if ethanol production increases too fast then the pressure on water resources may increase, apart from this there has also been debate regarding food security. Some experts argue that if large quantities of corn and other grains start going into ethanol production, food prices could be affected. For now, the government says the ethanol program is a big step towards striking a balance between energy security, farmers’ income and environmental protection. It is going to become an important part of India’s energy strategy in the coming years.
However, in the press conference organized regarding ethanol blending, many big experts from the auto and energy sector said that the decision to mix ethanol in petrol was not taken in a hurry, but it was implemented after a year of research and testing. He said that this will reduce pollution, reduce dependence on crude oil imports and farmers will also benefit.
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