New Delhi: Indian ethanol blended petrol programme has become one of the country’s biggest clean energy initiatives. On July 31, 2026, the Government of India issued a detailed clarification to address claims that ethanol production harms food security and depends on subsidised rice. According to the Ministry of Petroleum & Natural Gas, the programme protects food security first while reducing crude oil imports, supporting farmers, and helping consumers during global oil price shocks.
Indian Ethanol Blended Petrol Programme: Government Rejects Claims On Food Security
The government said reports claiming that ethanol production takes food away from poor people are misleading. Officials explained that no grain meant for the Public Distribution System (PDS), National Food Security Act (NFSA), welfare schemes, or mandatory buffer stocks is diverted for ethanol production.
Read also: India Approves E100 Fuel Framework, Opening the Door for 100% Ethanol-Powered Vehicles
Only surplus food grains certified by the Department of Food and Public Distribution are approved for ethanol production after all food security needs have been fulfilled.
Surplus And Damaged Grain Is Used
The clarification stated that ethanol production mainly uses:
- Damaged grains
- Broken rice
- Food grains unfit for human consumption
- Certified surplus stocks
The government said this converts waste into useful fuel instead of allowing it to rot in warehouses. It also creates additional income opportunities for Indian farmers.
Government Says FCI Rice Was Not Given Special Treatment
One major allegation was that FCI rice was sold to ethanol producers at unusually low prices. The government rejected this claim and said FCI rice is only one of several approved feedstocks used for ethanol production. It follows the same government pricing framework as other approved raw materials.
For Ethanol Supply Year (ESY) 2025-26, the approved ethanol procurement prices include:
| Feedstock | Ethanol Price |
| Maize | ₹71.86/litre |
| Sugarcane Juice/Syrup | ₹65.61/litre |
| Damaged Foodgrains | ₹64.00/litre |
| B-Heavy Molasses | ₹60.73/litre |
| FCI Rice | ₹60.32/litre |
| C-Heavy Molasses | ₹57.97/litre |
The government said this pricing shows FCI rice does not receive any special advantage.
Indian Ethanol Blended Petrol Programme: Rice Is Not The Main Source Of Ethanol
The clarification also addressed concerns that India’s ethanol programme depends heavily on rice. According to the government:
- In ESY 2023-24, FCI rice contributed only 0.02% of ethanol production.
- In ESY 2025-26, its share increased to 24.64%, but only because certified surplus stocks became available after all food security obligations were met.
- During the same period, maize’s contribution declined from 42.6% to 35.96%, showing producers shift between different approved feedstocks depending on availability.
Officials said the ethanol programme is designed around a flexible mix of approved feedstocks, not around any single crop.
Petrol Prices Could Have Been Much Higher Without Ethanol Blending
The government argued that the real question is not whether ethanol is cheaper than petrol. Instead, it asked what consumers would have paid if ethanol blending had not existed during the global crude oil price surge. According to the clarification:
- When global crude prices reached about US$135 per barrel, petrol in Delhi could have cost around ₹125 per litre without ethanol blending.
- Consumers instead paid about ₹94.77 per litre because 20% of every litre was domestically produced ethanol purchased at stable, pre-agreed prices.
- This resulted in estimated savings of nearly ₹30 per litre during the peak of the global oil crisis.
Economic And Environmental Benefits of Indian Ethanol Blended Petrol Programme
The government said the Ethanol Blended Petrol Programme has already delivered major national benefits, including:
- More than ₹1.97 lakh crore in foreign exchange savings.
- Replacement of over 316 lakh metric tonnes of crude oil imports.
- Reduction of more than 950 lakh metric tonnes of carbon dioxide emissions.
- Over ₹1.66 lakh crore paid to farmers and ethanol producers, strengthening rural incomes.
Second-Generation Ethanol Expansion
The government said India is also expanding Second-Generation (2G) ethanol, which is produced from agricultural residues instead of food grains. Through the Pradhan Mantri JI-VAN Yojana, the country aims to use crop residues to reduce dependence on food grains while producing cleaner fuel.
Analytical View of Indian Ethanol Blended Petrol Programme
The latest clarification reflects the government’s effort to counter concerns surrounding ethanol blending with official data and policy details.
The government maintains that food security remains the first priority, with ethanol production using only certified surplus or damaged grain after statutory obligations are met. It also argues that blending ethanol strengthens India’s energy security by reducing dependence on imported crude oil and protecting consumers from international oil price volatility. However, discussions around vehicle compatibility, fuel efficiency, and long-term feedstock sustainability continue in the public domain. These issues remain part of the broader policy debate, even as the government reiterates that its ethanol programme follows a phased and evidence-based approach.
