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Informist, Thursday, Jun. 18, 2026

 

By Anand JC

 

MUMBAI – The current discount of INR 20 per litre for the E85 blend of petrol and ethanol over the price of E20 blend is insufficient to boost adoption of flex-fuel vehicles and drive their sales, a senior official at a leading automaker told Informist. The company is currently in touch with the authorities seeking a further cut in prices of E85 fuel.

 

At the current price of E85 fuel, consumers will find it difficult recover the cost of running a flex-fuel vehicle, given the lower mileage they offer and the price premium charged over conventional petrol or diesel car models, the executive said. "We don't see a higher uptake in volumes of our flex-fuel cars, customers will not be able to recoup cost of flex-fuel cars at current fuel prices," the executive said.

 

Maruti Suzuki India Ltd. is currently the only manufacturer of flex-fuel cars in the country. In the two-wheeler segment, Hero MotoCorp Ltd. recently launched flex-fuel versions of Splendor and HF Deluxe. Tata Motors Passenger Vehicles Ltd. plans to launch its flex-fuel car later this year or earlier next year. Other carmakers including Toyota and Hyundai Motor India Ltd. have showcased prototypes of their cars that can run on higher blends of ethanol and petrol.

 

Maruti Suzuki's WagonR Bioflex has been priced at INR 723,900 ex-showroom, compared to the ZXI+ manual transmission variant priced at INR 649,900. The comparable petrol-run WagonR model delivers a fuel efficiency of around 23 kilometres per litre on E20 fuel. However, the fuel efficiency of the newly launched flex-fuel model is expected around 16 kilometres per litre on E85 fuel, a staggering 30% lower compared with the petrol model.

 

"The calorific value of ethanol is around 30% lower (than petrol), so the mileage is bound to take a hit," said Puneet Gupta, Director at S&P Global Mobility. "There is also the case of running economics which could affect sales of FFVs (flex-fuel vehicles). Real life mileage may be even lower depending on factors such as quality of fuel, climate conditions, among other reasons," he said.

 

According to Emkay Global Financial Services, there will be a gradual increase in the government's ethanol blending programme, while variants such as E85 and E100 are likely to be limited to specific use cases. "Large-scale adoption would require tax restructuring to offer attractive discounts, and the vehicle universe would take time to adapt to higher blending levels," they said in a report Thursday.

 

E85 ECONOMICS

Standard fuel pumps across India currently sell E20 fuel blend predominantly. This is a blend of 20% ethanol and 80% petrol. A litre of E20 petrol costs INR 102.12 per litre in Delhi, while E85 costs INR 82.12.

 

A consumer incurs a cost of INR 4.44 per kilometre on a petrol WagonR. This increases to INR 5.31 per kilometre on the WagonR Bioflex, showing a difference of roughly 20%.

 

"The price of E85 fuel is our primary consideration, currently it is the only thing that will affect sales of flex-fuel vehicles," the executive quoted above said. "We have made representations to the government at the company level to reduce prices of E85 fuel even further to boost acceptance of our flex-fuel cars," they said.

 

Carmakers had initially asked for a INR 30 discount for prices of E85 fuel compared with E20. At current prices, WagonR Bioflex users will see fuel price parity only when E85 fuel prices are sold at around INR 71-INR 72.

 

But even at the suggested prices of E85 fuel, the customers will not be compensated for the additional cost of buying a flex-fuel car, and for the worries surrounding purchasing a new technology. This, especially at a time when cars running on compressed natural gas and electricity have a much more established fuel infrastructure, even if relatively speaking.

 

A similar analysis was done by automotive magazine Autocar India on the Suzuki Gixxer SF 250 FFV, a two-wheeler capable of running on flex-fuel. Results showed a 24% lower fuel efficiency compared to the same vehicle running on E20 fuel.

 

ETHANOL DILEMMA

The primary reason behind promoting the adoption of flex-fuel vehicles has been to gradually shed India's reliance on imported fuel. India currently depends on imports to meet around 90% of its crude oil needs.

 

One way the government could bring down the prices of E85 fuel is by reducing the cost of ethanol itself, the executive with the carmaker said. In an interview with Informist, Indian Sugar and Bio-energy Manufacturers' Association Director General Deepak Ballani said sugar mills are reluctant to divert sugar for ethanol production, as the prices offered for sugarcane-based ethanol remain unattractive.

 

For the 2025–26 (Nov-Oct) ethanol supply year, the ex-mill prices of ethanol supplied to oil marketing companies range between INR 57.97 and INR 71.86 per litre, depending on the raw material. Ethanol made from sugarcane juice is priced at INR 65.61 per litre, while ethanol from maize is priced at INR 71.86 per litre.

 

In this scenario, importing feedstock for ethanol from countries such as Brazil would be a better option as its landed price continues to be lower than in India, the executive said. To support higher ethanol blending in petrol, the Bureau of Indian Standards recently established fuel-quality standards for E22, E25, E27, and E30 fuel blends.  END

 

Edited by Akul Nishant Akhoury

 

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