5 min readAug 23, 2026 06:45 AM IST First published on: Aug 23, 2026 at 06:45 AM ISTThe ethanol-petrol debate refuses to abate on the streets, and just like the Cockroach Janta Party’s Jantar Mantar NEET protest, it is getting traction on Instagram, and other social media platforms. The government is finding it challenging to quell public disenchantment and turn opinion in favour of E20 (petrol blended with 20 per cent ethanol). There are reasons beyond politics why reasoned communication by the government is being disregarded by people, and there are possible solutions, which are being resisted by the government due to big implementation hurdles.But some in the government have their ears to the ground, are filtering the noise, and picking the right signals. They are looking behind to see what could have been done to incentivise those who feel shortchanged on mileage due to E20 rollout. And now, thinking ahead, if something is still possible to win them back. In India, they understand mileage and price are two key aspects that influence decision-making in lower and middle-income families.AdvertisementAll along, the NDA government has defended the blending programme and rightfully so, while simultaneously emphasising that it did not begin under the present government. Indeed, the pilot was launched during AB Vajpayee’s government in 2001, and the E5 roll out across several states was attempted in 2006 under the UPA. But it gathered momentum after the present government assumed charge in 2014. Ethanol blending reached 10 per cent in 2021-22, and gradually rose to 19.2 per cent in 2024-25, and is now set at 20 per cent.There is no doubt, ethanol blending has many advantages. It cuts fossil fuel use, produces lower carbon emissions, reduces dependence on imports, saves precious foreign exchange, and insulates the country from the vagaries of geo-politics that affect supplies. While this may be appreciated by those affected, they are not convinced how all this translates into benefits for them.They don’t get it, because as a government officer explains, the consumer is not seeing a tangible price benefit despite bearing the cost of a lower mileage. And this is because the consumer does not have a choice. For example, when petrol pumps started dispensing E5, could they have offered it alongside petrol? Consumers then have a choice. They could be incentivised to transition to E5 by being charged lower than petrol for this blended fuel. Similarly, for E10, and now E20. Differential pricing becomes an incentive; consumers would make peace with a 3-5 per cent lower mileage because of a lower-priced E20 compared with E10.AdvertisementThis can be best explained by what the government did following changes in the income tax regime, points out another officer. A new tax regime with lower taxes but no major exemptions was introduced in April 2020. It was voluntary. As the new tax regime evolved over the years, the Finance Ministry continued to offer tax payers the option to file returns under the old tax regime. The old regime offers exemptions, but tax rates are high. It has been six years, and the two systems continue alongside. But almost 90 per cent of all individuals have shifted to the new tax regime.To be fair, the government has tried to explain the advantages of E20 by comparing India’s retail fuel prices with that of other countries in South Asia and Europe. The petrol price hike in India between June 2022 and June 2026 was in the lower single digits, at less than 6 per cent, whereas it was more than 15 per cent in European countries, and more than 20 per cent in South Asian countries.you may likeBe that so, it is tough to make the Indian consumers believe the counterfactual. What did not happen, but could have happened, is a concept that does not stick easily. The fact that E20 was a reason why the government could keep petrol prices low despite the Indian crude oil basket averaging over $100 a barrel is still lost on most consumers.The transition from E10 to E20 happened in four years. Given the West Asia crisis, it is possible the government was worried about its impact on oil prices in the long term. It is possible prices could remain higher for longer. It has not played out that way, but uncertainty prevails in the region, and the motivation for transitioning to E20 could be many. When global crude oil is at $70 a barrel or less, E20 is costlier to produce than pure petrol, according to government estimates. Ethanol becomes much cheaper at relatively high global crude oil prices of $120-130 a barrel.Clearly, for many reasons, moving away from fossil fuels is a long-term strategic imperative. Ethanol blended fuel is definitely an alternative, but requires behavioural changes among consumers. It is here that public policy gets interesting, and challenging. Offering consumers a choice of fuel and making them see a price advantage will make a difference. What can’t be done about mileage, can choice and differential pricing cover for that?The writer is Managing Editor, The Indian Express.Off the Record is a fortnightly column