In late October the Ministry of Road Transport and Highways notified an amendment to the Central Motor Vehicles Rules that lets manufacturers certify flex-fuel vehicles to run on E100, pure ethanol, as well as E85. The rules apply only to vehicles designed for these fuels, and the ministry said no owner of an existing vehicle has to switch or modify anything. E85 went on sale in Delhi in June, and the first flex-fuel cars and motorcycles are being readied for launch.

This blog has looked at how far India’s ethanol surplus stretches and how Brazil sells E30 and E100 side by side. This piece asks the two questions the new rule raises: would a driver save money on E100, and is there enough ethanol for a flex-fuel fleet?

How India got to E100

Per kilometre, E85 costs more than petrol

A litre of ethanol holds about 21.3 megajoules of energy against 32.4 for petrol, so a litre of E85 carries about 76% of the energy of a litre of E20, and a litre of E100 about 71%. A car needs correspondingly more litres to go the same distance. At Rs 82.12 a litre, E85 is 20% cheaper at the pump than E20 but about 6% dearer per kilometre. It would have to sell at about Rs 77.7 to break even.

Engines built for high-ethanol fuel can recover some of the gap, because ethanol’s high octane allows a higher compression ratio. If a flex-fuel engine were 5% more efficient on ethanol, the break-even prices would rise to about Rs 81.6 for E85 and Rs 75.7 for E100. That is a favourable case, and E85 at Rs 82.12 is still just above it.

E100 has a harder problem. To match E20 per kilometre at the same efficiency it would have to sell at about Rs 72.1 a litre. Oil companies already pay about Rs 71.2 a litre for ethanol delivered to their depots, including GST and freight. That leaves less than Rs 1 a litre for excise, VAT, the dealer’s commission and the oil company’s own costs. Petrol in Delhi carries about Rs 36 of excise and VAT. If E100 bore the same excise and VAT rate, it would cost about Rs 109 a litre, about 51% more per kilometre than petrol. Industry body SIAM has said E100 works only at about 30% below the price of petrol, which matches the energy arithmetic.

There is not enough ethanol for a large flex-fuel fleet

India’s distilleries offered 1,776 crore litres for the 2025-26 supply year, and about 576 crore litres had no buyer even after the fourth-quarter top-up. Moving a share of petrol demand to E100 needs about 1.4 litres of ethanol for every litre of E20 it replaces, less the 20% ethanol those vehicles already burn. On the 2025-26 petrol pool, the unsold surplus would cover flex-fuel vehicles taking about 8% of petrol demand. A 10% share would need about 731 crore litres more.

The same litres are already spoken for. This blog’s central forecast puts the ethanol needed for E30 alone at 2,221 crore litres in 2029-30, more than everything offered this year. Every litre that goes into a flex-fuel tank is a litre that cannot raise the blend in ordinary petrol, which every car on the road uses.

What Brazil’s flex-fuel fleet shows

Brazil is the proof that flex-fuel cars work at scale: about 82% of its light vehicles can run on any mix of petrol and ethanol, and ethanol supplied about 40% of the energy its cars used in 2025, by this blog’s arithmetic from ANP sales data. But it also shows that a flex-fuel fleet does not guarantee ethanol is used. Drivers fill with hydrous ethanol when it costs less than about 70% of the petrol price, and switch back when it does not. The national ratio averaged 68.57% in 2025, and hydrous ethanol sales fell 2.3% that year to 21.24 billion litres; in the first three months of 2026 the ratio was above 72%.

What keeps Brazilian ethanol competitive is tax. Since a 2022 constitutional amendment, Brazil must tax biofuels less than the fossil fuels they replace, and keep that gap for 20 years; São Paulo, for example, charged 13.3% state tax on hydrous ethanol against 25% on petrol. India has no equivalent rule, and the E100 notification says nothing about price.

What would fix this

• The Ministry of Petroleum and Natural Gas and the states should publish how E85 and E100 are priced and taxed, and set a rule that keeps their price per kilometre below petrol’s, as Brazil’s constitution does, before asking people to buy flex-fuel vehicles.
• Oil companies should post E85 and E100 prices with a per-kilometre comparison at the pump, so buyers can see whether the cheaper litre is the cheaper journey.
• The ethanol roadmap should state how much ethanol is reserved for flex-fuel vehicles and how much for raising the blend in ordinary petrol, since the same supply cannot do both.
• Vehicle makers should publish certified fuel economy for each flex-fuel model on both E20 and E100, so the efficiency gain on ethanol is measured rather than assumed.

These are proposals from this blog, not recommendations any agency has adopted.

What this piece could not establish

The final notification, G.S.R. 911(E), is not in the Gazette of India index this blog used, so its contents come from press reports; they match the two drafts, of 27 April and 13 July 2026, which were read in the Gazette of India’s own text through the SansadSaar index of the archive.org Gazette of India collection (CG-DL-E-28042026-272125; G.S.R. 634(E), CG-DL-E-27072026-274834). No E100 retail price has been published, so the E100 figures are break-even prices, not quotes. The per-kilometre comparison assumes the same efficiency per unit of energy on every fuel, with a 5% gain as a sensitivity; real results will depend on each engine. The tax arithmetic leaves out the dealer’s commission and oil company costs, and treats Delhi’s VAT as 19.4% of the pre-VAT price. Brazil’s energy shares use this blog’s assumed energy content for hydrous ethanol (20.2 MJ/L) and an average 2025 blend of 28.25%. Reports differ on whether Indian Oil’s 2024 “Ethanol 100” was pure ethanol or a blend with additives.

Sources and caveats

About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.