Government of India officially mandated the nationwide sale of E20 petrol (petrol blended with 20% ethanol) starting April 1, 2026.
In a notification issued by the Ministry of Petroleum and Natural Gas, the government directed all Oil Marketing Companies (OMCs) to ensure that every fuel station across all States and Union Territories provides petrol with a minimum Research Octane Number (RON) of 95.
The “Quality Leap”: Why RON 95?
Previously, regular petrol in India had an octane rating of roughly 91 RON. By mandating RON 95, the government is standardizing a “premium” quality of fuel as the new national baseline.
- Anti-Knocking: Higher octane levels prevent “engine knocking” (premature ignition), which can damage internal components over time.
- Ethanol’s Edge: Ethanol naturally has a high octane rating (approx. 108 RON). Mixing it at a 20% ratio makes achieving the 95 RON standard easier and more cost-effective.
- Performance: Modern high-compression and turbocharged engines perform significantly better and more efficiently with 95 RON fuel.
Impact on Vehicles
| Vehicle Category | Compatibility Status | Expected Impact |
| Post-2023 Models | Full Compatibility | Designed for E20; likely to see smoother performance. |
| BS6 / Older Cars | Partial Compatibility | May experience a 3% to 7% drop in mileage due to ethanol’s lower energy density. |
| Vintage / Legacy | At Risk | Possible long-term wear on rubber seals, fuel lines, and plastic components. |
Pro Tip: Owners of older vehicles (pre-2023) are advised to monitor their fuel lines and filters more closely, as ethanol’s corrosive properties can loosen old deposits in the fuel tank.
Strategic & Economic Rationale
This move completes the advancement of the E20 target from the original 2030 deadline to the 2025-26 period.
- Forex Savings: The government estimates that ethanol blending has already saved India over ₹1.40 lakh crore in foreign exchange since 2014 by reducing crude oil imports.
- Farmer Income: By sourcing ethanol from sugarcane, maize, and surplus grains, the mandate funnels billions of rupees directly into the rural economy.
- Emission Cuts: E20 fuel reduces carbon monoxide emissions by up to 30% to 50% compared to unblended petrol.
Market & Industry Concerns
Despite the environmental benefits, the transition presents a few hurdles for the industry:
- Margin Squeeze: The cost of ethanol has recently risen above the price of refined petrol, putting pressure on the profit margins of OMCs like IOCL, BPCL, and HPCL.
- Branded Fuel Crisis: With “regular” petrol now meeting the 95 RON standard, the USP of premium fuels (like XP95 or Power95) is significantly diminished, forcing companies to re-evaluate their premium marketing strategies.
