Ethanol blending saved petrol consumers in Delhi nearly Rs 30 a litre at the height of the recent crude price surge, the Petroleum Ministry said on Friday. The statement came as the ministry defended the programme against criticism over fuel efficiency, food security and cost to the exchequer.
Petrol without blending was “projected to cost around Rs 125 per litre in Delhi” when the Indian crude basket rose to about $135 a barrel, the ministry said in a press release. Consumers paid Rs 94.77 a litre instead and the ministry further said the reason was that “20% of every litre was domestically produced ethanol, procured at stable, pre-agreed prices that were insulated from the global crude price spike”.
The government held petrol and diesel prices unchanged for nearly 75 days after the West Asia conflict began on February 28. It raised them by Rs 7.5 a litre in May. Standard 91-octane E20 petrol currently retails at Rs 102.12 a litre in Delhi, while 100-octane petrol is priced at Rs 169.
Foodgrain being diverted to ethanol production?
The ministry denied that foodgrain meant for the poor was being diverted to ethanol production. It also rejected claims that subsidised rice from Food Corporation of India stocks was being used to support the programme.
Earlier this week, the road transport ministry addressed the efficiency question in the Lok Sabha. Citing a study by ARAI, SIAM and Indian Oil Corporation, it said vehicles designed for E10 fuel may see efficiency fall by 2-6% when run on E20. The range covers BS-III, BS-IV and BS-VI vehicles and varies with category and age. The oil ministry had told the Rajya Sabha on July 20 that the drop in such vehicles is limited to about 3-5%.
Blending levels raised in phases
Road transport minister Nitin Gadkari told the Lok Sabha that the shift to E20 followed validation of fuel systems, engine durability, drivability, material compatibility and emissions performance. Automakers, oil marketing companies and the sugar and grain industries were consulted through the process, he said. Both ministries said blending levels were raised in phases as distillery capacity and infrastructure expanded.
The government said laboratory studies and real-world data show no adverse impact on vehicle performance from E20. More than 20 crore two-wheelers and over 3 crore petrol cars have run on the blends, with no verified evidence of engine failure linked to ethanol, it added.
‘Ethanol blending not a taxpayer subsidy’
The ministry also rejected the charge that the programme depends on public money. “Ethanol blending is not a taxpayer subsidy. It’s India’s energy insurance and it has already delivered when the crisis hit,” it said.
Foreign exchange savings from the Ethanol Blended Petrol programme have crossed Rs 1.97 lakh crore, according to the petroleum ministry. Blending has substituted more than 316 lakh metric tonnes of crude imports and cut carbon dioxide emissions by over 950 lakh metric tonnes.
Farmers and distillers have received more than Rs 1.66 lakh crore in direct payments under the programme. India’s dependence on imported crude remains at 88%, the petroleum ministry stated in the release.