Chief economist says India should bring fuel back with lower ethanol blend

A top government advisor has said that India should bring back fuel with a lower blend of ethanol. This is the first time a senior official has called for more fuel options in response to growing consumer anger over a controversial policy change.

E20, petrol blended with 20% ethanol, was launched last year. Since April 1, this fuel is the only one available at gas stations in the country. This is part of the Prime Minister NarendraModi's plan to reduce oil imports while also reducing pollution.

The move has caused widespread concern about vehicle performance and auto part damage. Many car owners have vented their frustrations on social networks and called on the government for lower ethanol-blended variants of fuel to be available.

In an opinion piece published in the Indian Express newspaper on Monday, India's Chief Economic Adviser V Anantha Nageswaran stated that restoring a lower blend, such as E10, along with the option to purchase E20 would calm the majority of public concerns.

The article was written in collaboration with Akash Poojari. He is a consultant at the Indian Department of Economic Affairs. The two men said that their opinions were personal. However, it is rare for Indian top officials to publicly disagree with a government's position.

India's Oil Ministry did not respond immediately to a request for comment. The government stated last month that it has no plans to return to lower blended petrol varieties, such as E0 and E10.

The opinion piece follows a report from last week stating that automakers had privately discussed their concerns regarding?E20 contamination days before a lobby of the industry sent a complaint letter to the government. This was subsequently withdrawn.

In the opinion piece, it was stated that there is no evidence to support concerns of engine damage. However, other effects of E20 were feared on older vehicles.

The opinion piece stated that "India has approximately 75 to 80 million older two-wheelers... old rubber seals?that aren't rated for alcohol?are a different problem... retrofitting these seals... will take years."

New Delhi must "protect existing fleets while retrofit program catches up," the report said. (Reporting and editing by Edwina G. Gibbs; Reporting by Hritam K. Mukherjee)

(source: Reuters)