Ethanol-blended petrol: concerns should be addressed

The Supreme Court, on Monday, dismissed a public interest litigation filed by advocate Akshay Malhotra seeking to amend the new rule requiring the use of 20 percent ethanol in petrol used in vehicles and to make the existing grade of petrol also available. A bench comprising Chief Justice B.R. Gavai and Justice K. Vinod Chandran found the facts stated by the government to be valid and dismissed the petition. The court's decision almost confirmed the position of the Union Government's Attorney General R. Venkataramani, who had stated that the government's well-considered decision would benefit the country's sugarcane farmers and save a huge amount of foreign exchange by reducing crude oil imports.

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The reform to add ethanol to petrol vehicle engines began in 2014. The main advantage stated was that blending ethanol made from sugarcane, bamboo, corn, rice, etc., which is available in plenty in India, with petrol would help significantly reduce crude oil imports. The government which decided to increase the ethanol content which was initially 5 percent, then increased to 10 percent, has now made 20 percent mandatory from now on. The government is boasting that the target of 20 percent ethanol blending has been achieved five years ahead of the 2030 deadline set for this change. Since it is being implemented as part of the national energy policy aimed at energy security and environmental protection, fuel producers (oil marketing companies) have no option to deviate from this. The government's response to the argument in the petition was that using fuel with 20 percent (E 20) can result in a foreign exchange saving of Rs 43,000 crore per year. Energy security will be improved by reducing the import of 245 lakh metric tons of crude oil. The Centre also claimed that it would reduce carbon dioxide emissions by 736 lakh tonnes per year, which is equivalent to planting about 30 crore trees, and that farmers would also get about Rs 40,000 crore annually.

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However, despite such claims of technological gains, it is important to note that some factors affecting citizens have also been raised on this issue. Chief among them are concerns and doubts about the new fuel configuration. The government has apparently not done enough to alleviate them. Union Petroleum and Natural Gas Minister Hardeep Singh Puri, who explained the benefits of the new product, does not factually refute the concerns. And most of the participants in the press conference held on August 30 in this regard were only stakeholders such as oil companies, vehicle manufacturers, fuel companies, distilleries, certification agencies, etc. Although some companies have denied the observation that insurance companies will not honour the claims from these vehicles, it sounds more like a word in favor of the government. It is pointed out that if older vehicles, not configured for E-20 fuel use it, that may lead to increased corrosion and subsequent engine damage, causing losses to owners and insurance companies. Similarly, although air pollution may be reduced with the use of more ethanol, the government does not deny that the energy value of E-20 fuel is lower than that of E-10 generation vehicles which will reduce mileage.

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To hide this aspect, the government is raising childish arguments such as that vehicle mileage is not determined by fuel alone but by other factors also like condition of the vehicle and the road, driving style, traffic density etc. People who have tried the new fuel however say that fuel efficiency is felt to be lower than what the government claims. It would have been idea if all these facts had been explained by an impartial expert committee acceptable to the public. The government has not done anything on that score. Despite privatisation, even today public sector companies have the upper hand in the fuel market. IOC, with 63,000 petrol pumps, is in the first place, followed by Bharat Petroleum and Hindustan Petroleum. Other entities all put together will not amount to a large percentage. This situation will help in implementing government policies easily. On the other hand, the government controls the procurement price for ethanol sources like sugarcane. The government may also ensure more profits for the corporations that produce it. Although fuel prices should come down when they are used, which are more economic than the price of crude oil, the government is normally not ready to bring down the pump price. Even when the international price of crude oil falls, the government does not reduce the retail price. The reasoning behind this is that when the price of crude oil increases again, intermittent increase will not be necessary and both rise and fall will balance out. In any case, the government needs to be more cautious about introducing E20 petrol abruptly. It would be wise to give universal acceptance to E-20 fuel only after ensuring its technical suitability.