Page 50 - Policy Economic Report- June'26

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

3. E85 rollout commences across 48 retail outlets of Public Sector OMCs; Save Money, Save
Environment, Save Foreign Exchange!

Union Minister for Petroleum and Natural Gas Shri Hardeep Singh Puri launched E85 fuel at an IndianOil
retail outlet in New Delhi on the occasion of World Environment Day 2026. Senior officials of the Ministry
of Petroleum and Natural Gas, and CMDs of public sector OMCs were also present during the event.

E85 is a high-ethanol blended fuel comprising 80–85% ethanol and 14–19% petrol, specifically designed
for use in flex-fuel vehicles. The initiative aims to facilitate the adoption of Flex-Fuel Vehicles (FFVs), which
are capable of operating on ethanol blends from E20 to E100, without restricting consumers to a single
blend.

The rollout commences across 48 Public Sector OMC’s retail outlets (ROs) in the country, enabling flex-
fuel vehicle users to access this cleaner fuel. The initiative is slated for nationwide expansion. The same
would be scaled up to 500 ROs by December 2026 and about 5000 ROs by December 2027 and help raise
India’s aggregate ethanol blending levels to nearly 26 % by 2030-31.

Speaking at the event, the Minister said India has demonstrated its ability to successfully balance the
“Energy Trilemma” of energy availability, affordability and sustainability, while ensuring stable fuel
supplies, protecting consumers from global energy volatility to the maximum possible extent. He noted
that India has one of the lowest increases of fuel prices since February 2026.

Highlighting that ethanol blending has increased from 1.53% in 2014 to 20% today, with the target
achieved five years ahead of schedule, he stated that this transformation has helped save over ?1.84 lakh
crore in foreign exchange and substituted nearly 302 lakh metric tonnes of crude oil imports. This has
been driven by the contribution of India’s farmers, who have evolved from being the country’s
“Annadatas” to becoming its “Urjadatas” as well.

Benefits of E85:

• E85 is priced nearly ?20 per litre lower than conventional petrol to ensure that the economic
benefits of domestically produced ethanol are passed on to consumers.

• Flex-fuel vehicles operating on E85 can reduce lifecycle greenhouse gas emissions by around 61
% compared to conventional petrol vehicles.

• With a Research Octane Number (RON) of about 108, ethanol offers superior knock resistance
that allows engines to operate at higher compression ratios and optimized ignition timing.

• Higher ethanol blends promote cleaner and more complete combustion, resulting in near-zero
particulate matter emissions contributing to improved urban air quality.

Elaborating further, the Minister stated that if 50 % of new two-wheelers and four-wheelers transition to
flex-fuel vehicles, it could generate demand for over 312 crore litres of ethanol and result in nearly
?12,403 crore flowing directly to farmers. He added that such a transition could also lead to annual foreign
exchange savings of nearly ?15,151 crore and reduction of CO2 emissions by 66.4 lakh metric tonnes.

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