ICRIER calls for temporary E15 ethanol blending cap during supply shortages
ICRIER has recommended that India allow petrol ethanol blending to fall to E15 when domestic supplies are tight or E20 raises food and feed costs. The think tank backs E20 as the long-term goal, while urging more flexible feedstock sourcing and a larger role for maize.
What happened
ICRIER urged India to temporarily lower petrol ethanol blending to E15 when domestic supply is tight or E20 raises food and feed costs. It recommends flexible
Key facts
- E20 long-term ethanol-blending target
- Temporary E15 blending proposed during supply shortages
- India achieved E20 in ESY 2025-26
- OMCs procured 6.79 billion litres in ESY 2023-24 at about Rs 48,757 crore
- OMCs procured 10.33 billion litres in ESY 2024-25 at about Rs 73,996 crore
- OMCs procured 7.05 billion litres through June 2026 at about Rs 49,577 crore
- Ethanol supply projected at 12 billion litres in 2025-26, up from 1.73 billion litres in 2019-20
- Projected six-year CAGR: about 38%
Why this matters
Potentially more flexible feedstock rules and greater maize use could create partnership or acquisition opportunities across ethanol supply, grain logistics and biofuel-processing assets.
What to watch
- Ministry of Petroleum and Natural Gas decision on temporary E15 blending permissions or shortage protocols.
- Monthly ethanol blending rates, ethanol tender volumes, and oil marketing company procurement prices.
- Government restrictions or incentives affecting rice, sugarcane juice, broken rice, damaged grain, and maize use for ethanol.
- Maize, sugar, poultry-feed, milk, egg, and packaged-food wholesale-price trends.
- Monsoon performance, reservoir levels, crop estimates, and foodgrain-stock data.
- Changes in food inflation and consumer downtrading toward value grocery formats.
- Stress-test private-label and branded food margins against higher maize, sugar, and animal-feed costs.
- Secure longer-duration procurement contracts for corn-based ingredients, sweeteners, poultry, eggs, dairy, and edible packaged foods.
- Increase supplier reporting on ethanol-linked commodity exposure and pass-through timing.
- Use value packs, targeted promotions, and private-label substitution to protect price-sensitive household demand if food inflation accelerates.
- Monitor fuel-price and logistics-cost implications: lower blending can marginally raise petroleum-import exposure and transport-cost sensitivity.