Against the backdrop of Iran ' s war disrupting energy transport and the United States threat to impose tariffs on Russian crude oil buyers, India is accelerating the advance of alternative fuels to reduce its dependence on imported crude oil. Some 88.5 per cent of the world ' s third largest consumer of crude oil is dependent on imports, and the upwards of oil prices have begun to increase inflation and fiscal pressure.

Rising oil prices and Russian oil risk

Since July, international oil prices have risen cumulatively by more than 25 per cent. The Energy Data Agency Kpler warned that if both the Red Sea and the Strait of Hormuz were blocked, oil prices could rise by $100 per barrel.

At the same time, India ' s dependence on Russian crude oil remains high. According to Kpler data, in June the share of Russian crude oil in Indian crude oil imports exceeded 50 per cent. India purchased about 2.6 million barrels of Russian crude oil on a daily basis 15 days before this month, accounting for more than half of all imports.

This has also exposed India to new external pressures. The United States suggests that if peace does not prevail between Russia and Ukraine in September, Russian crude oil buyers may face 100 per cent tariff.

ethanol mixed early landing.

India has enforced 20% ethanol gasoline blending since April, five years ahead of schedule. Market research institutions and industry considered this to be one of the most direct alternatives to crude oil in India.

Rystad Energy states that ethanol mixing helps to reduce gasoline imports, reduce crude oil dependence and save foreign exchange expenditures. By 2030, this policy could save India nearly $4 billion per year; in the case of high oil prices, it could save $6.4 billion.

  • The government said the project started in 2014
  • Cumulative savings on foreign exchange of about Rs 1.97 trillion
  • The cumulative replacement of crude oil is about 31.6 million tons.

In addition to ethanol, India is promoting compressed biogas, isobutol and hydrogen energy applications. According to the local media, the government is considering mixing 15% isobutol in diesel. India also completed its first hydrogen fuel train test last week.

The old car's perfect for questioning.

However, the ethanol mixing policy is increasingly being challenged. Consumers suggested that E20 gasoline could cause engine damage and lead to a decline in re-flight and higher maintenance costs.

Omdia Analyst noted that Indian automobiles did not start to produce E20-fitted models until 2023, and that earlier-produced gasoline trucks had not been designed or calibrated for this fuel ratio. For this group of owners, the use of high percentage ethanol gasoline may face higher costs.

On Monday, a number of Indian parliamentarians have raised the issue in Parliament. The Government has repeatedly denied that ethanol mixing has a general negative impact on vehicles. Automobile manufacturers also denied widespread damage.

Additional information:Reuter reported last week that a consumer court in India had requested Maruti Suzuki to replace the vehicle for a consumer claiming damage to the E20 gasoline, a case that had further raised the controversy.