Ethanol anxiety sparks fresh diesel demand, say experts

India’s transition to ethanol-blended petrol is facing an unexpected challenge: growing consumer uncertainty over E20 fuel is prompting some prospective car buyers to reconsider petrol and look towards diesel, even as CNG and electric vehicles continue to gain ground.

Automobile experts, speaking on The Federal’s AI With Sanket show, said concerns over fuel contamination, mileage, vehicle compatibility and uncertainty over future blending policies are influencing consumer choices. While E20 has several advantages for the country, apprehensions over its long-term impact and performance are adding another layer to an already evolving automobile market.

Concern of contamination

One of the key concerns is the possibility of contamination. Experts pointed to the presence of moisture in underground fuel storage tanks at petrol pumps as an issue that needs greater attention. Ethanol is hygroscopic, meaning it absorbs moisture, and inadequate handling at different stages of the supply chain could potentially affect fuel quality.

Also read: For now, no ethanol blending in diesel, says govt

Experts stressed that this does not necessarily imply deliberate adulteration, but that ethanol-blended fuel requires tighter handling and monitoring from production and storage to its eventual use by consumers.

Mileage concern

For consumers, however, mileage remains one of the most immediate concerns. Aspi Bhathena, editor of Car India and Bike India, said diesel vehicles continue to offer a significant fuel-efficiency advantage, something that could influence buyers as petrol prices remain a concern.

“If you take two similar cars — one with a petrol engine and another with a diesel engine — the diesel car is at least 35 per cent more fuel-efficient than an identical car with a petrol engine of the same size.”

He also described diesel as a good fuel that has not received enough credit for being a green and efficient fuel. “It’s been labelled [otherwise], I don’t know why, but it’s more, I think, political than anything else.”

“With the drop in the mileage, it is going to concern people as petrol is not getting cheaper by any means,” Bhathena said. He added that if a diesel vehicle delivers substantially better mileage, consumers could reconsider diesel despite the industry's broader shift away from the fuel.

He also flagged uncertainty over vehicle compatibility with different ethanol blends as another concern for buyers contemplating a new car.

Also read: ‘Contamination, not E20, is the real problem; govt must fix it first’

“If you are buying a car today and you are going to get stuck with a car that is not going to work with its E20-compliant and E10-compliant fuel, what is the point of buying a brand-new car and putting your money into that?” he said.

Fuel quality question

Bhathena cited an incident at an HPCL petrol pump on the Mumbai-Pune Expressway to underline his concerns over contamination. He said the pump, located near a large food court, was temporarily shut after several cars that had refuelled there reportedly broke down.

“If HPCL says there are no problems, let me tell you, if you drive on the Bombay-Pune Expressway, there's a big food court and a food mall with a huge HPCL petrol pump, which was shut down because people filled up petrol there and they couldn't even leave the premises. About seven-eight cars stopped working,” Bhathena said.

He said the petrol pump remained shut for around 10-15 days before operations resumed, adding that the incident raised questions about claims that contamination was not a concern.

For consumers, Bhathena said such incidents could add to concerns about buying a new vehicle amid the transition to E20.

Diesel’s demand and supply

Yogendra Pratap, editor of Auto Today, said the reported increase in enquiries for diesel vehicles over the past two to three months should be viewed alongside the industry's production constraints.

Automakers cannot immediately increase diesel-car production simply because consumer demand rises, he said, as manufacturing plans and supply chains are typically decided months in advance.

Pratap said diesel's inherent energy density and fuel efficiency continue to make it attractive to some buyers. He also argued that fuel choices should ultimately depend on whether they meet prescribed emission standards.

Why CNG and EVs are not an easy switch

The renewed interest in diesel comes even as CNG and electric vehicles are becoming increasingly popular. CNG, in particular, has moved beyond being primarily a fleet-fuel choice, with more private car owners opting for it to reduce running costs.

Also read: E20 fuel cuts emissions but trims mileage by 2-6 pc, Gadkari tells Lok Sabha

However, CNG infrastructure remains a major constraint. Pawar pointed to shortages, inadequate pressure at some filling stations and long queues as factors discouraging consumers. He said motorists can sometimes spend considerable time waiting at CNG stations only to be able to fill a limited quantity of fuel.

EVs, meanwhile, offer a more favourable long-term outlook, Pawar said, particularly for consumers who have access to charging at home or at their workplace. Their lower running costs make them attractive for daily commuting.

The challenge remains long-distance travel. Although charging infrastructure is expanding rapidly, EV owners still need to plan longer journeys around the availability of charging points.

Confidence test

Experts broadly agreed that ethanol blending is beneficial for India in terms of reducing dependence on imported crude and strengthening energy security. However, they said the transition needs to address consumer concerns around fuel quality, corrosion, contamination, mileage and vehicle compatibility.

Pawar also pointed to policy uncertainty and the possibility of future changes in ethanol-blending targets as factors affecting consumer confidence.

For now, the E20 debate is not simply about petrol versus ethanol. It is reshaping how consumers evaluate their next vehicle — weighing diesel's mileage advantage against CNG's infrastructure constraints and EVs' charging requirements.