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Iran war boosts ethanol pitch.But at what cost?

Mint New Delhi

|

March 30, 2026

India's ethanol makers are pushing for a hike in the fuel blending ratio and a mandate for flex-fuel vehicles following the spike in crude oil prices due to the West Asia war.

- SAYANTAN BERA

For petrol, India already has a norm of 20% blending with ethanol made from maize, rice and sugarcane.

Should it convert more food to fuel, and at what cost? Mint explores.

1 How has India's ethanol blending plan progressed?

Addressing Parliament on the West Asia war on 23 March, Prime Minister Narendra Modi said ethanol blending in petrol has now gone up to 20% from just 1.0-1.5% a decade ago. Ethanol, a biofuel made from agricultural crops, is now replacing about 45 million barrels of imported crude oil every year (total imports were about 1,803 million barrels in FY25). As per the petroleum ministry, ethanol blending in petrol has helped India save 1.44 trillion between November 2014 and July 2025.

The ministry also estimates that the programme has led to CO2 emission reduction equivalent to planting 300 million trees. In addition, it said that the plan is generating an annual farm revenue of 40,000 crore.

2 What are ethanol manufacturers lobbying for?

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