The E30 Petrol Scam: You’re Paying More Price for Less Mileage

Añadido: 2026-05-23

[00:00:00]Three things are happening simultaneously and they're all connected. Petrol got three rupees more expensive.

[00:00:05]>> Fuel prices are once again on fire.

[00:00:10]>> Petrol diesel.

[00:00:14]>> The government released a draft notification for E85 and E00 fuels with a public comment window open until May 28th. And Indonesia quietly confirmed it's moving forward with B50, a policy that will divert a massive chunk of its palm oil away from global markets and into its own vehicles. If you're wondering what Indonesian palm oil has to do with your petrol price, well, that's exactly what this video is about.

[00:00:39]Hello folks, I'm Shashank. You're tuned into Funshots TV. Today, let's talk about fuel and food and why solving one problem is quietly making the other one worse. Let's start with the 3 rupees hike. See India's government had held petrol and diesel prices steady for over two years. State elections, economic optics, inflation optics. So there was always a reason to wait. But crude oil at over $100 a barrel changes that math completely. India's oil marketing companies IOC, BPCL, HPCL were absorbing losses on every liter that they sold.

[00:01:11]That isn't sustainable for very long obviously. So the hike came and the honest answer to will it go higher is it depends entirely on how long the state of Hormus stays disrupted. If the crisis extends more hikes follow that's just a simple math. Now the government's framing around all of this is that there's a structural solution already in works and that solution is ethanol blending and yes everyone hates it. But to be fair India has genuinely done something impressive here. A decade ago ethanol made up barely 1.5% of petrol in your tank. By last year that figure had crossed 19%. The target was 20% by 2030 and India hit it 5 years early. That reduced crude oil imports by a meaningful amount and saved the government roughly 40,000 crores in foreign exchange in just the last supply year. That's not nothing. So yes, the ethanol program has worked. The question is what working actually cost and where the government is trying to take it next. Let's talk about E20 first because chances are your vehicle is already running on it and you may not have noticed anything except slightly lower mileage and it hurts me as a bullet 350 owner. Ethanol has about 27% less energy density than petrol. A liter of ethanol carries less energy than a liter of petrol. So when 20% of your fuel is ethanol, you lose roughly 6 to 8% of your mileage compared to pure petrol.

[00:02:35]Your tank takes the same number of kilometers to drain, just a little faster. Now, ideally, that would be offset by a lower price. Ethanol is cheaper to produce domestically than crude is to import. So, in theory, E20 should cost less at the pump than pure petrol did. But it doesn't. The price per liter has stayed similar because fuel taxes, which makes up more than 55% of what you pay at the pump, don't adjust for energy content of the blend.

[00:03:01]The government collects tax on the volume and not the energy. So as a blend moved from E10 to E20, the consumer quietly started paying roughly the same per liter while getting slightly less per liter. The savings from cheaper ethanol went to X-er and not the tank.

[00:03:16]That's one part of the story. The other part is that mechanics in Chennai and Nagpur and Lucknav have been quietly reporting fuel line corrosion, rubber seal failures and clogged injectors in older vehicles that were not designed for 20% ethanol. Bajage auto issued advisories to BS3 and BS4 bike owners explaining how to minimize ethanol impact. The government called it false propaganda by oil companies. Now both things can be true at once. Some vehicles are genuinely fine and some genuinely aren't. And the people who are caught in the middle are discovering it one repair bill at a time, including me.

[00:03:52]Now this makes you ask, even with this outrage, why is the government moving to E85 and E00? The draft amendment that went out for public comment this month proposes including 85% and 100% ethanol blends as official fuel categories for personal vehicles. Tata Motors has confirmed a flex fuel vehicle by end of 2026 and early 27. Mari and Hyundai and others are working on theirs. But the catch is our existing vehicles cannot run on E85. You just can't pull up to a petrol pump that's dispensing E85 in a car built for E20 and expect it to end well. The infrastructure for separate storage tanks and dedicated dispensing at fuel stations don't exist yet either.

[00:04:29]So the program that the government is announcing for 2026 will need a few more years of vehicle and infrastructure roll out before it actually reaches the average person at the pump. But it doesn't mean that the current crisis, the 106 rupees petrol crisis, the state of Hermus crisis will not be meaningfully erased by E85 for years.

[00:04:47]The solution being announced and the crisis happening are operating on completely different timelines. Okay.

[00:04:52]Now where does the ethanol come from?

[00:04:54]India's ethanol production has grown enormously over the past decade. Maize now contributes nearly 48% of all ethanol produced more than sugarcane which has kind of slipped to under 31%.

[00:05:04]Rice from FCI stocks makes up another 13.5%. So the three crops that are responsible for powering India's fuel independence are rice, maize and sugar cane. Now all of them are food. Okay.

[00:05:16]And what's happened as ethanol demand has grown is exactly what you would expect. Farmers are rational. If maize and sugar cane pay better because there's a guaranteed buyer at a government set price, they switch to maize and sugar cane. In Madhya Pradesh, farmers have been moving away from soybean in Karnataka and Maharashtra away from cotton and ground nut. Oil seed acreage fell 5% last year. Pulse acreage fell 7%, now these are crops where India already imports heavily. So the more we push ethanol, the fewer oil seeds and pulses our farmers grow and that deepens our dependence on imported edible oil and imported dal to feed a country of 1.4 billion people. Now put a number on that. India's ethanol blending program has saved roughly 1.7 lakh cr in crude oil imports since 2014. That sounds like a lot. India's annual import bill for edible oils and pulses alone in FI26 was $23 billion. That's roughly 2 lakh cr rupees. One year of food imports costs more than the entire decade of ethanol savings and that annual food import bill is going up and not down because the crops that would reduce it are being converted to fuel. Now this brings us to Indonesia and the reason this matters for your kitchen is actually very direct. Indonesia is the world's largest palm oil producer. Palm oil is there in everything. India's most imported edible oil. We spend about 8.3 billion dollars on it annually with more than half of that coming from Indonesia.

[00:06:39]It's in your cooking oil, your biscuits, your shampoo, your soap. It's everywhere because it's cheap and it yields far more hectare than any other alternative.

[00:06:47]Indonesia just moved from B40, which is 40% palm oil in diesel, to B50, a government policy where 50% of every liter of diesel sold in Indonesia contains palm oil. What now? When you divert that much of your output to biodeiesel, there's simply less left overall to export. Indonesia's exportable surplus is expected to fall from around 27 to 28 million tons to roughly 22 million tons. That tightens global supply and tight global supply means higher prices. And higher prices for palm oil means higher prices for the cooking oil on your shelf, the biscuit in your tin and the subzi on your plate.

[00:07:22]So here's the thing. Indonesia is doing exactly what India is doing. It's turning food into fuel to reduce its dependence on imported petroleum. It's a completely rational national decision.

[00:07:31]And the consequence of both countries making that rational national decision simultaneously is that global edible oil supply tightens. Food prices rise and India which is already importing more food because its own farmers switch to ethanol crops pays the bill. Every country is trying to be energy independent by making food into fuel and that's making food more expensive everywhere. So where does that leave us?

[00:07:53]Well, the ethanol program has real logic behind it and genuine achievements to its name. Reducing crude dependence is a legitimate goal, especially when a war in Middle East can double your oil price in 3 months. The push toward E85 and flex fuel vehicle is a reasonable long-term direction. Now, none of that is technically wrong, but the food and fuel trade-offs are very real and they don't disappear because the policy is well intended. Now, India imports $23 billion in edible oils and pulses every year. Its farmers are switching away from the crops that would reduce that number. Indonesia is diverting the oil India depends on to replace those crops.

[00:08:28]And the ethanol program that's supposed to reduce India's import vulnerability is in a roundabout way deepening a different kind of import vulnerability.

[00:08:36]One that's measured not in barrels of crude oil but in liters of cooking oil and kilograms of dal. Now the war in West Asia is the trigger for all of this. But the structural tensions underneath it were building long before any war started. They'll need addressing long after the war ends. And folks, that's it for me today. Now, let me know in the comments what you're noticing at the pump or the kitchen in your city.

[00:09:00]Are you feeling heat from both the sides? Let me know. I will see you in the next