To reduce dependence on petrol and lower fuel import costs, the central government is considering making the introduction of flex-fuel engine vehicles mandatory. However, the open market dynamics and reality are quite different. Due to a shortage of ethanol in the market, passenger car manufacturers are reluctant to build high-capacity (high-blend) E85 engine vehicles. Instead, they are planning to manufacture and launch vehicles with E20 engines.
To resolve this dilemma, discussions have taken place between both parties. According to central government sources, flex-fuel vehicles are distinct from conventional vehicles. Because mixing any amount of ethanol into petrol damages normal engines, the current focus is on E20 (20% ethanol blended with petrol) vehicles. The government’s goal was to mandate E85 (85% ethanol + 15% petrol) and E100 (100% ethanol) vehicle manufacturing to significantly reduce oil imports. However, oil companies are planning to stall this initiative.
According to experts in oil companies, storing high-ethanol blended fuel for a long time is highly hazardous. If it is not kept airtight, ethanol absorbs moisture from the air, which can damage vehicle engines. Furthermore, if demand is not met, maintaining a steady supply of such fuel will be impossible. If companies manufacture these vehicles without a guaranteed fuel supply, they face massive financial losses.
On the other hand, automobile manufacturing companies argue that regular petrol cars are much cheaper than flex-fuel vehicles. At a time when the availability of E85 fuel across the country is highly uncertain, customers will show little interest in buying such expensive vehicles. According to industry experts, until a seamless supply chain for ethanol fuel is established, creating demand for these vehicles in the market will remain an uphill task.
Flex-Fuel Plans Hit Roadblock: Auto Makers Drag Feet Over Ethanol Shortage
