E20 vs E10 petrol: No decision yet on switching fuel blend, BPCL says logistics manageable

Bharat Petroleum Corp Ltd (BPCL), India's second largest fuel retailer, on Thursday said there is no decision to replace E20 petrol with E10, clarifying that the current debate is over whether older vehicles should have access to a lower-ethanol blend and how an additional grade of petrol could be supplied across India's vast fuel-distribution network.

In a media call post the company's annual shareholder meeting, BPCL Chairman and Managing Director Sanjay Khanna, however, said he saw no operational or logistical challenge in switching from E20 petrol to E10 if the government decides to change the ethanol-blending policy.

"I never said that E20 will be changed to E10," he said, adding that it was being debated in some circles whether older vehicles should have an option of lower-ethanol blend fuel.

"That doesn't mean E20 will be out and E10 will be in," he said.

His comments come amid a wider policy discussion over whether owners of older vehicles should have access to E10 petrol, which contains 10 per cent ethanol, alongside E20, which contains 20 per cent ethanol. India has progressively increased ethanol blending in petrol as part of efforts to reduce crude oil imports, lower emissions and support domestic ethanol production.

Khanna stressed that no decision has been finalised on changing the current fuel-blending regime.

"Nothing has been finalised," he said. "But to answer your question, what if it happens or what are the changes required? I will say nothing because already we established E20. It's only a matter of changing from E20 to E10, or suppose it has to be done. On that account, we don't see as a company any challenge for that matter. None of the oil companies will have a challenge to go from E20 to E10." It is being debated whether India should make E10 petrol, which contains 10 per cent ethanol, available alongside E20 fuel, following concerns raised by some consumers and industry stakeholders about the impact of higher ethanol blends on vehicles and fuel availability.

"As of now, various aspects are being considered, but nothing has yet got finalised. Once it will be done, we'll be definitely calling you and sharing it with you," he said.

Asked what changes oil companies would need to make if E10 were introduced, he said the existing infrastructure would not pose a major hurdle.

The distinction, however, is between switching the blend and supplying an additional grade of petrol alongside E20. The latter presents a more significant logistical challenge, particularly given the scale of India's fuel-distribution network.

Earlier this month, the government's Chief Economic Advisor V Anantha Nageswaran, alongside Akash Poojari, who is a consultant in the Department of Economic Affairs, in an opinion piece, stated that India should bring back a petrol variant with a lower ethanol blend to protect millions of older vehicles.

E20 petrol, containing 20 per cent ethanol, was rolled out last year and has been the only petrol variant available for sale at fuel stations across India since April 1 as part of efforts to cut India's dependence on imported oil, support domestic agriculture and reduce emissions.

Some users, particularly of non-BS-VI vehicles, have, however, reported a drop in vehicular performance and damage to auto parts - a claim the government has repeatedly dismissed as far from the truth. Oil Ministry has maintained that it's not feasible to build and maintain infrastructure to supply multiple grades of fuel.

Nageswaran and Poojari said the evidence did not support widespread claims that E20 damages vehicle engines, but argued that the policy could pose problems for India's large fleet of older two-wheelers.

India has roughly 75 to 80 million older two-wheelers built before BS-IV that run on carburettors. A carburettor cannot sense the extra oxygen in the blend and adjust for it, so on E20, the engine draws in too little fuel for the air it draws in and runs hot. Further, older rubber seals that are not rated for ethanol are a separate problem, as they degrade on contact with the fuel regardless of engine temperature, they wrote.

The authors recommended restoring a lower-blend fuel, such as E10, alongside E20 to protect older vehicles while allowing the government to continue its ethanol programme.

The government should "protect the existing fleet while the retrofit programme catches up," the opinion piece said.

The Ministry of Petroleum and Natural Gas had on multiple occasions last month stated that requiring every petrol station to stock pure petrol, E10 and E20 simultaneously would create substantial logistical difficulties.

India has more than one lakh petrol pumps, supported by an extensive network of refineries, terminals, depots and pipelines. Maintaining multiple grades of base petrol across the network would increase handling costs, complicate inventory management and reduce operational efficiency, the ministry had said.

The ministry has also said comparisons with premium petrol are misplaced because premium fuels are niche products sold in limited quantities at a significant price premium and are not separate nationwide base-fuel streams.

"Running parallel nationwide supply chains for pure petrol, E10 and E20 would be an entirely different proposition," the ministry had said.

The logistics issue is particularly relevant if E10 is to be offered as an additional option for older vehicles rather than as a replacement for E20.

The BPCL chairman acknowledged that the implications of supplying another grade are part of the ongoing debate.

"What are challenges related to supplies of another grade of (petrol)... those are challenges being debated," he said.