The government made a significant statement regarding its E20 policy, insisting on its immutability. According to the statement, despite high global crude oil prices during the conflict between the US and Iran, petrol prices did not rise significantly due to the implementation of the E20 policy.
Despite waves of discontent over E20, the government issued its fourth clarification on the matter within a week. It reported that in the event of an escalation of the conflict in the Middle East, petrol prices could reach 125 rupees per liter.
The Ministry of Petroleum explained in detail that during the war in Iran, global crude oil prices rose to $135 (equivalent to approximately 13,000 rupees) per barrel. This sharp price increase occurred because Iran closed the Strait of Hormuz following joint attacks by the US and Israel. This strait is a route for the import of oil and gas for the world, accounting for 20 percent.
The Ministry specified that when the price of crude oil in India reached approximately $135 per barrel, the projected price for unleaded petrol in India was around 125 rupees per liter. However, thanks to the addition of 20 percent ethanol, the average petrol price remained stable at about 95 rupees per liter.
The government noted that consumers paid 94.77 rupees per liter because 20% of the blend was domestic ethanol. Without this addition, petrol prices could have been 125 rupees per liter. Thus, during the crisis, consumers saved about 30 rupees per liter at the pumps.
Recently, the policy of blending 20% ethanol into gasoline has faced harsh criticism from opposition parties and consumer groups. Many vehicle owners claim that using E20 gasoline has led to reduced fuel efficiency and increased maintenance costs. Nevertheless, the government rejected these claims, stating that while E20 may reduce fuel consumption, its drawbacks are disproportionately smaller.
The government emphasized that one of the main advantages is reducing India's dependence on volatile global oil prices. India is the second-largest importer of crude oil, accounting for about 85% of the share. When the conflict in Iran began and the Strait of Hormuz was closed, petrol prices did not change for two months. The government eventually raised prices by only 7.5 rupees per liter in May.
Furthermore, the government stated that blending ethanol does not require taxpayer subsidies; it is a form of energy insurance for India. The Ministry also refuted claims about the use of subsidized grain, clarifying that rice obtained at concessional prices from the Food Corporation of India (FCI) is not used to produce ethanol. The Ministry strongly stressed that food security is not compromised, and ethanol is never produced at the expense of the poor.
