India Mulls Nationwide E85 Flex Fuel Vehicle Push to Cut Oil Import Dependency

The Centre is drawing up a nationwide policy to speed up the adoption of flex-fuel vehicles capable of running on ethanol blends of up to 85 per cent, as the conflict in West Asia sharpens the country's focus on reducing its dependence on imported crude oil. The plans were outlined by two people familiar with the matter, says a report by Mint. This comes at a time when India's existing 20 per cent ethanol blending mandate, introduced in 2025, has already drawn public complaints over reduced fuel efficiency and concerns about engine performance.

The Union Ministry of Petroleum and Natural Gas convened a meeting on Monday to take the issue forward. 

"During the meeting, a presentation will be made by the working group constituted for preparing the plan for the rollout of FFVs," one of the sources said, speaking on condition of anonymity, the report added. 

The working group brings together experts from oil marketing companies, vehicle manufacturers and government departments, and will present its findings to senior executives of state-run oil firms, representatives of the Society of Indian Automobile Manufacturers (SIAM) and officials from relevant ministries.

The urgency is driven in part by volatile global oil prices. Crude briefly crossed $100 per barrel during the conflict before easing following a ceasefire, though the risk of another spike remains. 

For a country that imports 90 per cent of its oil requirements, the fiscal exposure is considerable. Every $1 per barrel increase sustained over a year adds approximately ₹16,000 crore to India's import bill. The country spent $109.5 billion on oil imports in FY26, according to data from the Petroleum Planning and Analysis Cell.