Published on: 10 December, 2025 17:28 IST
India’s shift toward 20% ethanol-blended petrol (E20) has restarted an important public debate: If a vehicle gets damaged after using E20 fuel, who will be held responsible? While the government continues to promote E20 for its environmental and economic advantages, the uncertainty surrounding potential harm to vehicles especially older models has caused concern among consumers. This issue was recently debated in Parliament, where several members sought clarity on complaints about engine damage, reduced mileage, and disputes over warranty and insurance claims.
Whats is E20 fuel?
E20 fuel is a blend of 20% ethanol and 80% petrol (gasoline), this bio fuel initiative was introduced by the government to reduce oil imports, maintain fuel rates and emissions in india, but it may slightly decrease fuel efficiency (mileage) and requires compatible engine components in vehicles, with concerns raised about older cars not designed for higher ethanol content, though authorities state compliant vehicles are fine. This concept is already available in available in various countries in the world and they adopted it.
Recently, this issue was raised in Parliament. Many MPs sought clarity on whether E20 has caused engine damage, reduced mileage, or led to warranty and insurance disputes.
The Minister for Road Transport and Highways, Nitin Gadkari, made the government’s position clear: Studies conducted by government-backed agencies have not found significant performance issues or component damage due to E20.
Therefore, the government has no plan to create a compensation fund, even if damage is proven in individual cases.
In response, Union Minister for Road Transport and Highways Nitin Gadkari firmly stated that government-backed technical studies do not show any significant performance issues or component damage from using E20 fuel. According to the Minister, tests conducted by the Indian Oil Corporation (IOCL), the Society of Indian Automobile Manufacturers (SIAM), and the Automotive Research Association of India (ARAI) found no major differences in drivability, startability, emissions, or wear of metal and rubber components when vehicles were tested with E20. He emphasized that ethanol has a high octane value, and blending it at 20 percent effectively raises the fuel’s octane rating, which can actually help reduce engine knocking.
One concern frequently reported by consumers is a drop in mileage. The Minister acknowledged that ethanol contains less energy than petrol, which can lead to some reduction in fuel efficiency. However, he clarified that real-world mileage depends on many factors such as driving habits, road conditions, tyre pressure, AC usage, and overall vehicle maintenance. Therefore, the government does not attribute mileage variations solely to the use of E20 fuel. Based on these findings, the government has decided that there is no need to establish a compensation fund for any alleged vehicle damage linked to E20.
The absence of a government compensation mechanism shifts the responsibility onto manufacturers, insurers, and consumers. Vehicles sold after 1 April 2023 are designed to be E20-compliant, meaning their engines and fuel systems are engineered to handle the higher ethanol blend. For these newer vehicles, any damage due to manufacturing defects should remain covered under warranty and standard motor insurance policies. In contrast, older vehicles manufactured before April 2023 were designed for up to E10 fuel. Although E20 is not legally prohibited for these vehicles, they were not originally built to handle it, which creates a significant grey area. Manufacturers may deny warranty claims by arguing that the owner used a fuel grade the vehicle was not designed for, and insurance companies may reject claims on the ground that the damage was caused by “non-specified fuel” or gradual wear and tear.
If a vehicle owner believes that E20 fuel caused damage and their warranty or insurance claim has been unfairly denied, their primary legal remedy lies under the Consumer Protection Act, 2019. A complaint can be filed before a Consumer Disputes Redressal Commission against the fuel station, the manufacturer, or the insurer, depending on the facts of the case. They may also approach the Insurance Ombudsman if a claim has been wrongly rejected. While filing a Public Interest Litigation (PIL) seeking to suspend or strike down the E20 policy is unlikely to succeed because the Supreme Court has already supported ethanol blending as a national policy a PIL may be considered if there is widespread damage and evidence that the government failed to adequately warn the public or provide alternatives.
The Minister’s parliamentary reply made a crucial distinction that shapes the legal landscape. Older vehicles were only designed for E10 fuel, while newer vehicles are built to handle E20. Because of this policy structure, the government maintains that E20 fuel itself is not defective and therefore it cannot be held liable for damages. This also explains why the government is not considering any compensation fund despite calls from some MPs. The official position is that consumers must use the fuel appropriate for their vehicle type and that any issues related to maintenance, wear and tear, or misuse of fuel fall outside the government’s responsibility.
The question of accountability for vehicle damage caused by E20 largely depends on the vehicle’s manufacturing year. Newer, E20-compliant vehicles are unlikely to face legal or warranty hurdles, and the manufacturer or insurer may be responsible if they deny coverage without justification. Older vehicles, however, face a higher risk because they were not designed for E20 and may not be protected by warranty or insurance if damage occurs. In such cases, the burden falls on the consumer to pursue legal remedies. Unless widespread and verifiable harm emerges, government liability remains unlikely in its current policy framework.