International Journal For Multidisciplinary Research

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Ethanol Blending in India: Assessing the Cost Benefit Passed on to Petrol Consumers

Author(s) Ms. Shivani Singh, Mr. Anil Kumar, Prof. Dr. Anil Saxena
Country India
Abstract Abstract
India has increased the use of ethanol in petrol during the period examined here. Blending moved from 10.02% in 2021-22 to 19.24% in 2024-25, and the 20% level was reached during the 2025-26 ethanol supply year. For consumers, this leads to a straightforward question: if more ethanol is blended into petrol, can any related cost advantage actually be seen in the price paid at the pump? To examine this question, the study uses secondary data for 2021-22 to 2025-26 published by the Department of Food and Public Distribution (DFPD), Petroleum Planning and Analysis Cell (PPAC), Indian Oil Corporation Limited (IOCL) and NITI Aayog. The comparison uses selected Delhi petrol price-build-up figures. Dealer price, central excise duty, dealer commission, VAT and retail selling price are considered alongside the changes in blending. The figures do not move in the same way in all the periods considered. Between 2023-24 and 2024-25, the dealer price fell by ₹2.10 per litre and the retail price fell by ₹1.95 per litre, giving an observed pass-through of 92.86%. In the next comparison, from 2024-25 to 2025-26, the dealer price again fell, by ₹2.12 per litre, but the retail price remained unchanged because the increases in excise duty and dealer commission together were also ₹2.12 per litre. Overall, the figures do not show that a possible cost advantage from higher ethanol use necessarily appears as an equal reduction in the consumer price. The final amount paid at the retail outlet is also affected by taxes and the other components of the petrol price.
Keywords: Ethanol Blending, E20, Petrol Price, Consumer Benefit, Price Pass-Through, Excise Duty, VAT, India
Keywords Keywords: Ethanol Blending, E20, Petrol Price, Consumer Benefit, Price Pass-Through, Excise Duty, VAT, India
Field Business Administration
Published In Volume 8, Issue 5, September-October 2026
Published On 2026-09-29
DOI https://doi.org/10.36948/ijfmr.2026.v08i05.88849
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CrossRef DOI prefix of IJFMR is 10.36948/ijfmr

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