20

Jul

Rs 40 Petrol: Better Bet Than Ethanol CUT FUEL TAXES, NOT FOOD

image

Shivaji Sarkar


New Delhi I Monday I July 20, 2026

Ethanol impacts rattle a country that battles foodgrain production slump, acreage reduction and severe impact of rising prices, euphoric claims of petrol import substitution and stability.
A simple issue is complicated. The high petrol prices are man-made. If taxes on petrol are removed, it can be sold at Rs 40 a litre. Rather than experimenting with ethanol, India should rethink its fuel taxation. Petrol priced at about Rs 40 a litre even at $ 80 a barrel, through rationalisation of taxes, could deliver wide benefits by reducing inflation, lowering logistics costs, boosting manufacturing and agriculture, and increasing disposable incomes.
Presently, none ever imagined that ethanol warnings of Economic Survey 2026 and other government bodies would come true so soon to testify that it causes food shortage as well as that ethanol damages cars as Raipur Consumer Court award for replacing a car for its obvious damages testifies.
Beyond it the latest government reports also say that it has led to feed shortage spiking prices of egg, to begin with, and similar adverse effects.
There is no clarity on data on petrol production, imports as also ethanol procurement and blending as well as impact on the petroleum sector. Even the ethanol blending norms and supposed foreign exchange savings are shrouded.
India's ethanol push has intensified the fuel-versus-feed conflict by diverting 9–10 million tonnes of maize to distilleries, squeezing supplies for the poultry sector, which consumes about 60 percent of India's maize. The resulting shortage has sharply increased maize prices, raising chicken feed costs by up to 40 percent in some regions affecting poultry costs. 
The feed industry, which requires about 20–22 million tonnes of maize annually, is struggling to source raw materials. To offset deficits, the government has diverted subsidized rice from FCI godowns and increased imports, but the structural strain persists.
It is said to have caused another malpractice, according different published reports. A Bhopal report of July 13, 2026 says probe into ethanol-rice scam widens in MP and Maharashtra. The FCI, meanwhile, disputes the reports of Rs 1160 crore rice diversion.
To ease the poultry-feed crisis, the Compound Livestock Feed Manufacturers Association of India (CLFMA) and poultry bodies have urged the government to allow duty-free imports of maize and soybean, permit disastrous GM maize imports to bridge supply gaps, and adopt a long-term strategy to significantly increase domestic maize production. Higher acreage under various foodgrains again likely to cause food shortage. 
Kharif Acreage Falls 
The agriculture ministry updated data released on July 13, 2026 state that overall kharif acreage fell 16 percent as on July 10, with most crops reporting decrease in sown area compared to the same period in 2025. But farmers’ love for water-guzzling cash crop sugarcane, in demand for ethanol, is intact despite pressure on water resources due to weak monsoon.
The new data show that sugarcane acreage, not for sugar production, is higher at 56.7 Lha in 2025 than five-year average acreage of 54Lha.
Acreage for other cash crops, including jute and mesta, too reported higher acreage this year. Consequently pulses, cereals and oilseeds show the highest decline of up to 25 percent as alarm bells toll. Even coarse cereals decline by 22 percent, and paddy by 9 percent
The consumer (CPI) retail inflation also surged to 4.3 percent from 3.9 percent in July, surpassing the RBI tolerance limit of 4 percent, first time in 17 months.
Pulses and oilseeds like soybean are central to India’s consumption basket and nutritional outcomes, yet they are shifting lower down the priority order for the nation’s cultivators, the Economic Survey highlighted. 
It warned that over time, this imbalance could risk entrenching India’s dependence on edible oil imports and exposing domestic food prices to greater volatility during supply shocks. In other words, hypothetically even a fraction of crude imports reduces due to ethanol, India would be losing more in forex and food security in terms of edible oil imports
Even Automotive Research Association of India 2021 studies do not support the official claims. 
Brazil spent decades before introducing a vexed ethanol. 
Crude Import Surges, not Slumps
India consumes roughly 1,200 crore litres (12 billion litres) of ethanol annually for its fuel-blending program. Because the density of ethanol is far lower at 9.4 million metric tonnes (MMT) of ethanol used per year for cars and two-wheelers, actually benefit  not seen happening.
Meanwhile, the Central Information Commission has directed the Petroleum Planning and Analysis Cell to disclose historical data on petrol production and imports and ethanol procurement and blending and impact on the petroleum sector. 
India's import of approximately 245.5 million metric tonnes of crude oil, about 88 percent of total needs, cost between $135 billion and $138 billion during the 2025-2026 financial year. In 2014, India imported approximately 189 million tonnes (MT) of crude oil, valued at around $112 billion. This constituted about 77 percent of the nation's total energy demand and crude requirements for that fiscal year.
So, has ethanol really reduced crude imports? It has certainly increased sales of 499 distillers though no forex benefit to country 
The transition represents one of the world's fastest biofuel transitions. The government moved the 20 percent blending mandate forward from 2030 to 2025/2026. Distilleries were rapidly upgraded and incentivized to use both sugarcane and food grains, International Journal for Multidisciplinary Research (IJFMR) says. 
India’s ethanol production has surged dramatically between 2021 and 2026. Annual production capacity jumped from roughly 300 to 500 crore litres in 2021 to over 1,800 crore litres by 2026, driven by fresh capacity investments. The IJFMR sees little benefit to India. 
The broader Indian ethanol market size increased from approximately $2.8 billion USD in 2023 to an estimated $3.1 billion USD as of 2024–2025, charting a robust 14.5 percent compound annual growth rate. 
No firm study available that ethanol reduces crude import bill. Why is a simple issue complicated? It only needs to allow tax-free sale of petrol at no subsidy. 
It calls for an end to unvalidated ethanol experimentation, the diversion of public funds to boost distillery profits, and policies that risk damaging millions of Indian vehicles. Those resources could be better spent on national welfare instead of being justified through dubious and convoluted economic claims.

(The author is a senior journalist and media activist specialising in financial journalism.)

  • Share:

About Us

We must explain to you how all seds this mistakens idea off denouncing pleasures and praising pain was born and I will give you a completed accounts..

Contact Us

Contact Info

  • 70, Gyan Khand- 4, Indirapuram, Ghaziabad. Uttar Pradesh.
  • +91-9810533682
  • info@mediamap.co.in
  • Week Days: 09.00 to 18.00 Sunday: Closed