Amid the ongoing debate in India over the government's E20 petrol mandate and its impact on vehicle performance, Bhutan has declined an offer from Indian Oil Marketing Companies (OMCs) to supply E20 fuel. According to a report by The Bhutanese, Bhutan has requested India to continue supplying conventional petrol for as long as it remains available in the Indian market.
The primary reason behind Bhutan's decision is its ageing fuel storage infrastructure, which authorities believe is unsuitable for handling ethanol-blended petrol. The country's mountainous terrain has also been cited as a concern, as vehicles operating on steep roads require consistent power and performance.
The E20 debate
India's introduction of E20 petrol—a blend of 20 per cent ethanol and 80 per cent petrol—has generated considerable debate, particularly among owners of petrol vehicles manufactured before 2023. Many have reported reduced fuel efficiency, increased maintenance costs and greater wear and tear. While the government has acknowledged a slight reduction in mileage with E20, it has argued that the fuel offers improved acceleration and overall engine performance.
Since Bhutan imports all of its fuel from India, the country's fuel policy is directly affected by India's transition to ethanol blending. At present, Bhutan purchases higher-export-grade petrol and diesel from India, which are priced above the fuel sold at Indian retail outlets.
However, Bhutan's Department of Trade has declined the offer from Indian OMCs—Indian Oil Corporation (IOCL), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL)—to switch to E20 petrol.
Why Bhutan rejected E20
According to The Bhutanese, Bhutan's ageing underground fuel storage tanks are vulnerable to water seepage, making them unsuitable for storing ethanol-blended petrol.
Unlike conventional petrol, ethanol contains a hydroxyl group, making it highly hygroscopic, meaning it readily absorbs moisture from the surrounding environment. Conventional petrol, by contrast, does not absorb water as easily.
If E20 fuel is stored in tanks exposed to water contamination, the ethanol can absorb moisture, resulting in diluted fuel. The absorbed water cannot be easily separated from the fuel and can also accelerate corrosion in steel storage tanks and pipelines.
According to Bhutanese officials, this could eventually lead to engine-related issues and affect vehicle performance.
"Considering the existing condition and quality of several of the underground storage tanks, the import and handling of ethanol-blended fuel may pose challenges in ensuring fuel quality," the Bhutan government told The Bhutanese.
Authorities also noted that many of Bhutan's fuel depots are located in humid mountainous regions, where preventing condensation and moisture from entering storage tanks is particularly difficult.
Bhutan has therefore requested Indian OMCs to provide advance notice if India decides to increase ethanol blending beyond E20 or transition to fully ethanol-based fuel. It has also sought leak-proof storage tanks to minimise contamination risks.
Earlier this week, during proceedings in the Supreme Court, the government was reported to have described the E20 policy as an "experiment" whose results would become clear next year. After the remark triggered controversy, the government denied making the statement. However, a video of the Attorney General making the remark later circulated widely on social media.
Meanwhile, according to The Economic Times, India has already begun testing E25 petrol, which contains 25 per cent ethanol.
Bhutanese officials also said that if E20 fuel were accidentally supplied to the country, contamination would be easy to identify, as the fuel would turn milky if even a small amount of water entered the storage tanks.
Bhutan's decision highlights that the transition to ethanol-blended fuels may require different approaches depending on a country's infrastructure, climate and terrain, rather than a uniform model.
