What is E85 Fuel? India Launches 85% Ethanol Fuel at Select Retail Stations

Key Takeaways

• E85 fuel was officially launched in India on June 5, 2026. The fuel is a combination of 85% ethanol and will be made available at a reduced rate of around ₹20 per litre, lower than the regular petrol fuel. The fuel can be accessed from 48 retail fueling stations.
   
• Previously, India managed to introduce the blending of 20% ethanol in all the fuel stations, five years ahead of the deadline of 2030.

India looks to local energy sources to Cut Dependence on Imports of Crude Oil

Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, inaugurated the launch of E85 fuel at the IndianOil retail fuel station located in New Delhi. The new fuel source will be provided at a reduced price of around ₹20 per litre as compared to the E20 fuel mixture.

However, there is a downside as well. Ethanol contains fewer calories than traditional petrol fuel and reduces mileage in cars, especially as the blend ratio increases to 85%. Furthermore, issues relating to warranties on engines and potential changes to terms of insurance policies on flex fuel vehicles remain unexplored. 

Implications of the Introduction of the E85 Fuel in India

The target is for the availability of the new fuel at up to 500 retail stations till December 2026 and up to 5,000 retail stations by December 2027. It is expected that the project will bring the share of ethanol blending in India up to nearly 26 percent by the financial year 2030-31.

Here is a comparison of the new fuel with the existing standard fuel:

“Puri added that if 1% out of total vehicle sales in a year shift to E85 fuel, then it will lead to the consumption of 4 crore litres of ethanol. This would mean ₹160 crore reaching the hands of farmers while saving approximately ₹195 crore in forex.”

What is the Opinion of Experts on E85 Fuel?

“I am for electric vehicles as well, but these require technology and critical minerals that are largely imported. However, E85 fuel comes from the hard work and sweat of the Indian farmers. E85 fuel, for now, is the cleanest fuel in India,” said Hardeep Singh Puri, Union Minister of Petroleum and Natural Gas, at the launch ceremony.

Union Minister for Road Transport, Nitin Gadkari, said that the 18% GST applicable to ethanol-blended fuel should be reconsidered due to higher blending levels above 20%. Gadkari explained that the finance minister had assured him that a review would be conducted in regard to the matter. 

The studies performed by Indian Oil Corporation, ARAI, and SIAM have confirmed that E20 fuel provides better performance and acceleration and lower carbon emissions by 30% as compared to E10 fuel. Similar or even better results are expected for E85. 

Conclusion

It is possible to reduce the dependence on crude oil with the introduction of E85 fuel in India. The low cost of fuel, along with almost nil emission of particulates, makes the E85 fuel highly advantageous.

FAQs 

1. Is E85 fuel usable in any petrol vehicle?

No. This fuel can only be used in flex-fuel vehicles, which are manufactured in such a way that they are compatible with the fuel blend that includes high amounts of ethanol.

2. In which year was E85 fuel introduced in India? Why?

E85 fuel became available in India in the month of June in the year 2026 because India aimed to reduce its dependency on crude oil and to use more of the locally produced ethanol. The government also expects to boost energy security by relying on a home-grown alternative fuel source.