The question is whether the retail fuel business got more profitable after E20 arrived. The evidence found does not support that for the people who run the pumps, and it does not support it for the oil companies either. The dealer got one rise in seven years, it was a litigation settlement, and in real terms it gave back less than half of what inflation had taken since 2017. The oil companies’ margin was high while crude was cheap and went negative when crude spiked in 2026. The party that gained directly from E20 is the ethanol supplier, whose price is set by the government.

How much to trust it. The dealer-commission history comes from PPAC’s own table, posted on 3 December 2024, and inflation from MoSPI’s consumer price index. Everything else comes from search-result summaries of press, brokerage and agency pages, and the OMC margin figures are analyst or press estimates. Where this piece does arithmetic of its own, it says so.

Three margins, kept apart

Most “margin” stories blur these. A dealer’s commission is set per kilolitre by the oil company, so it does not move with the oil company’s profit or with ethanol economics; the older formula also had a small percentage-of-price component, which could not be reconciled with the published averages. The oil company’s margin is whatever is left between the controlled retail price and its cost, so it swings with crude. The ethanol supplier’s price is fixed by the government for each ethanol supply year.

What actually happened to the dealer

Delhi’s average petrol commission was about Rs 3.76 a litre in December 2022, Rs 3.77 in May 2024, and Rs 4.39 by April 2025. The jump is the 30 October 2024 revision that Indian Oil, BPCL and HPCL announced together after a pending case was resolved, with no change in pump prices. The press called it the first in nearly eight years, since 5 October 2016. PPAC’s own table says otherwise: there were four more increases after October 2016, the last and largest on 1 August 2017, and a small cut on 19 February 2019. The October 2024 step was the first increase in seven years and two months. The table is set out in the next section. It was posted on 3 December 2024 and shows nothing later, so a revision in 2025 or 2026 is still not ruled out. The Odisha dealers’ association said on 6 July 2026 that margins had not risen since 2024 despite a promise of six-monthly revisions; that is one association’s claim. One summary of a September letter from the national dealers’ body says commissions were not revised since 2017, which contradicts the 2024 revision and is left out.

The revision was worth about Rs 0.68 lakh a month to the average outlet, about Rs 8.2 lakh a year. The most E20’s mileage penalty could add is a few thousand rupees a month, and only if every buyer burns 2 to 6% more fuel; official estimates put the penalty at 1 to 6%, typically 3 to 5%. Petrol demand did grow 6.44% in April to August 2025, but that is general growth, and nothing isolates an E20 effect. Net profit is the missing number. One low-confidence estimate puts it at Rs 1 to 1.5 a litre, which would make the 2024 revision a third to a half of what a dealer keeps; no ICRA, CARE or brokerage study of dealer costs was found.

What PPAC’s own table shows

PPAC publishes the dealer commission on petrol and diesel as a dated table going back to April 2004, sourced to ministry and oil-company circulars. Until July 2011 it was a flat rupee amount per kilolitre. Since December 2013 for petrol and October 2014 for diesel it has two parts: a fixed amount per kilolitre plus a percentage of the product’s billable price. The percentage part rises on its own when the product price rises. The fixed part moves only when the oil companies revise it.

Between 1 August 2017 and 30 October 2024 the fixed part did not rise; it was cut slightly in February 2019. Consumer prices rose 45.3% over the same span (MoSPI CPI, August 2017 to October 2024). When the October 2024 revision came, it lifted the fixed part by 17.9% on petrol and 15.2% on diesel.

In December 2025 rupees, the fixed part of the petrol commission was worth Rs 3.91 a litre in August 2017 and Rs 2.69 by September 2024. The revision took it back to Rs 3.17, which restores about 40% of that loss. For diesel the figures are Rs 2.97, Rs 2.04 and Rs 2.35, about 34% restored. These are the blog’s own calculations. The percentage part, worth roughly Rs 0.6 to 0.8 a litre on petrol at today’s prices, grew with the product price over the same period and offsets some of the erosion. PPAC does not publish the billable price needed to measure that offset exactly.

The table also notes two things the earlier version of this piece did not have. Since 1 August 2017 eligible dealers get slab-based incentives through credit notes, which are not quantified anywhere found. And the oil company can recover a licence fee from dealers on company-owned sites: Rs 443.50 a kilolitre on petrol and Rs 369.58 on diesel for an ‘a’ site, Rs 184.34 and Rs 153.62 for a ‘b’ site, plus GST. For a dealer on an ‘a’ site, that fee takes about 14% of the fixed petrol commission.

Timeline

The E20 date matters for any before-and-after test. It launched on 6 February 2023 at 84 outlets, was sold at all public-sector petrol outlets by 2025, and became the only petrol at pumps from 1 April 2026 under the February notification. The blog’s earlier “April 2023 rollout” could not be confirmed. E10 is effectively no longer sold at public-sector pumps, and a plan for E10 in 95-octane premium grades is only under discussion.

The oil companies: margin followed crude

Analyst estimates put the combined petrol and diesel marketing margin at about Rs 10.3 a litre in April–June 2025 (Nomura) and a forecast of about Rs 8 for FY26 (Crisil), against a five-year average nearer Rs 3. That is the period when crude was cheap and pump prices were held. Then crude rose from about $70 to about $122 in a month in March 2026, and estimates for April–June 2026 turned to a loss of Rs 6 to 12 a litre on petrol and Rs 19 to 32 on diesel, with the estimates differing widely. Indian Oil reported a standalone net loss of Rs 2,661 crore for the quarter against a profit of Rs 5,689 crore a year earlier (details in the next section). The government cut excise by about Rs 10 a litre on 26 March with pump prices unchanged, then raised pump prices in four rounds from 15 May, and prices have been frozen since. No audited per-litre margins for FY23 to FY25 were found. The swing is explained by crude, the held retail price and the tax actions; no source ties it to E20.

What the listed companies’ own results say

The company results are the first thing to check against the analyst numbers, and they mostly agree on direction. Profit followed the refining margin, not any retail effect: Indian Oil’s standalone profit fell from Rs 39,619 crore in FY24 to Rs 12,962 crore in FY25 as its refining margin dropped from $12.05 to $4.80 a barrel, then recovered. BPCL and HPCL moved the same way. None of the three states a marketing margin per litre in anything seen, so the Rs 6 to 12 range stays an analyst estimate. For April to June 2026 the implied margins from brokerages differ: about minus Rs 5.4 a litre combined at BPCL and minus Rs 14.9 at HPCL (both from one brokerage), and minus Rs 10.6 on petrol and minus Rs 18.4 on diesel from Jefferies, via Reuters.

The April to June 2026 quarter is the sharpest case. Refining margins were very high (HPCL $23.8, Indian Oil $15.59 net of the export duty, BPCL $17.0 net of it), and all three still lost money, so the marketing loss on frozen retail prices more than cancelled the refining gain. HPCL’s loss of Rs 11,526 crore, with a pre-tax loss of Rs 17,446 crore and an EBITDA loss of about Rs 161 billion, is the largest; the Rs 161 billion figure that looked too large fits the pre-tax loss once depreciation and interest are added back. Indian Oil’s consolidated loss is smaller (Rs 1,631 crore attributable to owners, Rs 1,141 crore in total), and its year-ago consolidated profit was about Rs 6,808 crore, so standalone and consolidated figures must not be mixed. LPG compensation recognised in the quarter was Rs 3,622 crore at Indian Oil, Rs 1,898 crore at BPCL and Rs 1,980 crore at HPCL, under the Rs 30,000 crore the Cabinet approved on 8 August 2025. No compensation for petrol or diesel losses was found; the relief was the excise cut. Petroleum Minister Hardeep Puri was reported in July as putting cumulative under-recoveries at Rs 2.18 lakh crore.

Reliance, the largest listed private retailer, said in its Q1 FY27 results, as quoted in coverage, that it held domestic fuel prices at its outlets, which caused “under recoveries in fuel retailing”, and that the reintroduced special additional excise duty hurt domestic margins. It gave no rupee figure. Its Jio-bp network grew from 1,991 outlets in Q1 FY26 to 2,221 in Q1 FY27. Its profit has two bases, Rs 23,196 crore recurring and Rs 20,946 crore reported. The city-gas companies that run CNG stations earned about Rs 3.4 a standard cubic metre at IGL, Rs 7.9 at MGL and Rs 5.2 at Gujarat Gas in the quarter. Of the oil companies, only HPCL’s outlet count turned up (25,160 on 30 June 2026), and no filing gives throughput per outlet.

On E20 quality, the three oil companies’ joint statement of about 7 to 10 August 2026 reported chloride of 0 to 3 ppm from more than 1,000 samples and two outlets suspended (one report says four). The 2,573 outlets figure rests on unnamed ministry sources, and the companies have not confirmed it.

Ethanol: who earns the E20 margin

The oil companies’ ethanol bill was Rs 48,757 crore in ESY 2023-24 and Rs 73,996 crore in ESY 2024-25, with Rs 49,577 crore in the first part of ESY 2025-26, about Rs 1.72 lakh crore in all, per a Parliament reply of 20 July 2026. The weighted-average price for ESY 2025-26 is Rs 66.61 a litre ex-mill, about Rs 71 delivered. In July 2026 the Petroleum Ministry said E20 costs more to produce than plain petrol at about $70 crude, and becomes cheaper only at $120 to 130. E20 is priced the same as the old E10 in most cities, so the oil company absorbs any cost difference.

A conflict with this blog’s earlier model. The blog’s piece Ethanol Blending and the OMC Books credits ethanol with about Rs 7,243 crore a year of oil-company and refiner contribution at E20, mostly from exporting the petrol that ethanol displaces. The ministry’s statement has the opposite sign for the cost of each blended litre at normal crude. They can both be true, because the model counts the refiner’s export gain on freed-up petrol while the ministry compares the cost of the blend to plain petrol, but the model’s figure was not testable here and should be read as a refiner-side estimate, not a retail marketing margin.

Why 2026 is hard for the station

• Supply limits. Dealers in Punjab and Rajasthan alleged that oil companies cut supplies, and a 90-day central order reportedly capped diesel at 200 litres per vehicle a day. Jio-bp and Nayara capped diesel per customer in September. Lower volume means lower commission, as it is paid per kilolitre.
• The UPI fee. A merchant fee on UPI was due to take effect on 15 October; on 13 October NPCI deferred it until after Diwali, with no new date. The national dealers’ body wrote to the Finance Minister on 16 September asking for an exemption, and some dealers said they would stop UPI above Rs 2,000. The summaries disagree on the fee’s design (a flat Rs 5 above Rs 2,000 in one, a percentage fee in this blog’s earlier piece), and no outcome was found. Fuel is the category most exposed because the dealer’s margin is only about 3.9% of the ticket.
• E20 handling. Dealers say ethanol draws moisture, and that water above about 0.5% makes it separate in tanks built for petrol. Oil companies and the automobile dealers’ federation reject the contamination claims, and say tests run up to 12 times a day at 87,000-plus outlets. Petrol sales were reportedly stopped at 2,573 outlets as of 25 August, from unnamed ministry sources. No compensation scheme and no costed figures for tanks, filters or dispensers were found.
• Frozen prices and shrinking private share. Public-sector prices have been frozen since May, after about Rs 7.4 to 7.5 a litre of rises. The private networks’ share fell: Nayara’s petrol share from about 6% to 4% by April, with price rises of its own.

All kinds of station

Public-sector pumps are about nine in ten, so the dealer-commission story is the story for most stations. Private outlets have been historically higher-throughput, one source putting Reliance at 342 kilolitres a month around 2019-20 against about 135 for Indian Oil, but no current throughput or per-litre margin for Nayara, Jio-bp or Shell was found. CNG stations run on a different economics: Delhi CNG rose from Rs 77.09 a kilogram at the start of 2026 to Rs 86.98 on 29 August, while the city-gas companies’ own margins fell sharply in April–June 2026 (IGL to about Rs 3.4 a standard cubic metre from about Rs 6.2, MGL to about Rs 7.9 from Rs 12.35). Dealer commission on CNG was not found in current form.

So did margins improve after E20?

1. Dealers: one step of about Rs 0.65 a litre on petrol in October 2024, 20 months after the E20 launch and unrelated to it. Real income is squeezed by 2026 supply limits, the pending UPI fee and E20 handling complaints.
2. Oil companies: margins were high in FY24 to H1 FY26 because crude was low and prices held, and negative in 2026. The Petroleum Ministry says E20 costs more at normal crude.
3. Ethanol suppliers: the clear gainers: Rs 1.72 lakh crore of purchases across three ethanol supply years.
4. A fair test is hard because crude, the rupee, the March excise cut and the May price rounds all moved together with E20, and “the E20 launch” could mean the 2023 pilot, national sale, or April 2026.

Where the data stop

1. No dealer net profit. No published study of dealer costs, non-fuel income, or payback exists in what was found. The Rs 1 to 1.5 a litre is a blog estimate.
2. No audited OMC margins for FY23 to FY25, and the 2026 figures are analyst estimates that differ widely.
3. Dealer commission after December 2024 rests on a single price sheet repeated by a press item; PPAC’s table was posted on 3 December 2024, so a later revision could have been missed. The slab-based incentives are not quantified.
4. Private and CNG margins are mostly not found, and there is no dealer-owned or company-owned split.
5. Premium grades (XP95, Speed, Power) and non-fuel income were not quantified.

What would fix this

• PPAC should keep its dealer-commission table current past December 2024, add CNG, and publish the slab-based incentives paid by credit note since August 2017, which the table mentions but does not quantify.
• The Ministry of Petroleum and Natural Gas should commission and publish a survey of retail-outlet costs and net income by outlet type, so dealer profit is a measured figure, not a blog estimate.
• The oil companies should publish the number of outlets suspended for E20 contamination, the test results, and any compensation to dealers, so the 2,573 figure is official or withdrawn.
• The oil companies should report auto-fuel marketing margins per litre in their quarterly decks on a consistent basis, so analysts do not have to estimate them.
• The Ministry should publish the refinery-gate price of petrol and the handling charge on ethanol next to the ethanol price, so the cost comparison behind E20 can be checked.
• The Department of Financial Services should state the final UPI fee for fuel and whether dealers are exempt, since it falls on a margin of about 4%.

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

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.