Fuel stations may soon offer a supermarket-style choice of petrol, with multiple ethanol-blended variants that customers can choose depending on their vehicle compatibility, two people aware of the development said.
The government has advised state-run Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd and Hindustan Petroleum Corp. Ltd, as well as privately owned Jio-bp Mobility, Nayara Energy and Shell to begin work on dispensing infrastructure for E20, E22, E25 and E30 fuels, the people cited above said on the condition of anonymity. This comes Bureau of Indian Standards norms for new ethanol blends, and the government’s to allow fully ethanol-powered vehicles.
The rollout will involve investment in separate dispensing infrastructure, storage systems, blending controls and fuel quality monitoring mechanisms, one of the two people said. “Information on ethanol-blended petrol sold at fuel stations will have to be displayed clearly on dispensing pumps so that consumers can easily identify the fuel they are buying. Retail outlets will have to label the different variants,” the person added.
The initiative, which expands India’s E20 blending mandate, comes amid volatile crude prices in the backdrop of the, sharpening energy security concerns. The move comes as India grapples with a crude supply squeeze and volatile prices triggered by the West Asia war, especially the closure of the Strait of Hormuz, through which 20% of the world’s oil supply passes.
“It is also obvious that the prices of different variants are likely to differ,” the second person added.
Queries emailed to the ministries of consumer affairs and petroleum, as well as fuel retailers, remained unanswered.
Out of India’s 100,000 fuel stations, 90,600 are run by state-run OMCs, and the rest by the private sector. Pumps currently sell E20 fuel, while industry bodies and biofuel manufacturers have advocated movement beyond E20, citing surplus ethanol availability and the need to reduce oil import dependence.
C.K. Jain, president of Grain Ethanol Manufacturers Association, said, “Global markets like Brazil have taught useful lessons regarding how factors such as consumer flexibility and separate dispensing systems have facilitated countries in adopting higher ethanol blends. Retail outlets in India should also eventually offer multiple ethanol blends, but it would be based on regional demand, infrastructure, and vehicle compatibility.”
According to the government, blending has helped India save ₹1.7 trillion between November 2014 and February 2026. Over this period, India slashed carbon emissions by 87 million tonnes (mt), equivalent to planting about 350 million trees. In the ethanol supply year 2024-25, India saved over ₹40,000 crore by substituting imported crude with ethanol. India, the world’s third-largest oil consumer, imported $123.1 billion worth of crude oil in FY26, down from $137 billion in the previous fiscal.
“It would not be a massive infrastructure change. The cost of tankages and dispensers is borne by the oil (marketing) company,” said K.P. Murali, president of the Tamil Nadu Petroleum Dealers’ Association, representing around 7,000 petrol pumps. Tankages refer to the underground storage facility for fuel at petrol pumps.
“Even now, they sell different variants of petrol; so, similar demarcations are there in the tankages which usually hold around 15,000 litres. The company will have to amend and renew their PESO licence to bring the changes in terms of tankages,” Murali said. PESO stands for the Petroleum and Explosives Safety Organization under the petroleum ministry, which authorizes licences for commercial undertakings involving petroleum, explosives, and hazardous materials.
According to Murali, the fuel dispensers will have to be changed, but in any case, they have a lifetime of 10-15 years.
“At present, a fuel dispenser already has separate nozzles for diesel, premium petrol and regular E20 petrol. The same dispensing system can be expanded further to accommodate additional ethanol-blended variants such as E22 to E30,” said Prashant Sinha, who runs a fuel station in Patna.
Ethanol-blending has captured middle-class attention amid concerns that blended fuel could affect vehicle fuel efficiency and engine performance. The government, however, claims that E20 petrol actually delivers better acceleration and improved ride quality.
On 12 August, the petroleum ministry said vehicle owners did not find any issue related to drivability, metal compatibility and plastic compatibility while using E20 petrol. The ministry has also rejected suggestions that E20 causes a ‘drastic’ reduction in fuel efficiency as ‘misplaced’.
India produced about 20 billion litres of ethanol as of March 2026, against a demand of about 11 billion litres under the current 20% blending mandate, leaving manufacturers with surplus capacity.
Petroleum demand in India is growing significantly every year, and has been reaching record levels. According to provisional data from the Petroleum Planning & Analysis Cell (PPAC), total petroleum product consumption in India stood at a record 243.19 mt in FY26, with petrol demand at 42.58 mt.