Centre denies Bhutan rejected E20 petrol import offer, calls claims "incorrect."
Bhutanese newspaper had cited a trade department document flagging ethanol storage concerns.
E20 remains under fire over mileage, engine compatibility and Gadkari family ethanol ties.
India has found itself in the middle of a fresh controversy involving its neighbour Bhutan, this time over the export of ethanol-blended petrol.
The Centre on Sunday issued yet another clarification on E20 petrol, this time over reports that Thimphu had refused to import the fuel from New Delhi.
1 June 2026
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In a fact check posted on its official social media accounts, the Ministry of Petroleum and Natural Gas (MoPNG) said claims that Bhutan had declined an offer to import E20 petrol were "incorrect". It said no Indian oil marketing company (OMC) had made such an offer and that there was no proposal to export E20 petrol to the country.
The clarification came days after the Himalayan kingdom's newspaper The Bhutanese reported that the country's government had asked Indian fuel suppliers to continue supplying regular petrol instead of E20 fuel because of concerns over fuel storage infrastructure and handling.
The latest episode has once again put the spotlight on E20, a fuel that has become the subject of repeated government clarifications, social media campaigns and political attacks.
What Exactly Happened in the Bhutan Case?
The report by The Bhutanese, citing officials, said Bhutan was not importing E20 fuel and had asked Indian public sector fuel suppliers to continue supplying regular petrol.
After the government's denial, the newspaper's editor, Tenzing Lamsang, posted on X what he said was a written response from Bhutan's Department of Trade. The document said the country was not importing E20 petrol and raised concerns about the handling of ethanol-blended fuel.
The response noted that ethanol is hygroscopic, meaning it readily absorbs water. It said that given the condition of some underground storage tanks maintained by fuel dealers, importing and handling ethanol-blended fuel could pose challenges in ensuring fuel quality and preventing contamination.
The document also said Bhutan had requested Indian PSUs and OMCs to continue supplying regular petrol as long as it remained available in India and sought advance notice if New Delhi moved to higher levels of ethanol blending.
However, the document did not explicitly say that Indian OMCs had formally offered to export E20 petrol to the neighbouring nation.
Notably, there was no direct statement from the Bhutanese government confirming the rejection or posting a clarification at the time of filing this story.
What is E20 Petrol?
E20 is petrol blended with 20% ethanol and 80% gasoline.
Ethanol is an alcohol-based biofuel produced from feedstocks such as sugarcane, maize and damaged food grains.
The Ethanol Blended Petrol Programme was officially launched in 2003 and the Centre initially targeted 20% ethanol blending by 2030 but achieved the milestone in 2025, five years ahead of schedule.
New Delhi has argued that higher ethanol blending helps reduce dependence on imported crude oil, lowers emissions and provides an additional market for agricultural produce.
India imports more than 85% of its crude oil requirements, making energy security one of the key reasons behind the push for ethanol blending.
Why Has E20 Become Controversial?
The controversy around E20 has largely centred on three concerns: engine compatibility, fuel efficiency and vehicle maintenance.
As E20 became more widely available, social media platforms saw an increase in claims that the fuel damages engines, substantially reduces mileage and is unsuitable for many vehicles currently on Indian roads.
Consumer complaints and anecdotal accounts have further amplified these concerns.
At the same time, the government and automobile manufacturers have maintained that E20-compatible vehicles are designed to run on the fuel without adverse effects.
The Ministry of Road Transport and Highways has said vehicle manufacturers have been producing E20 material-compliant vehicles since April 2023 and that all new vehicles manufactured from April 2025 are expected to be fully E20 compatible.
There is no evidence that E20 damages vehicles specifically designed and calibrated for the fuel.
However, older vehicles that were not engineered for higher ethanol blends may experience issues with certain fuel-system components if they are not compatible with ethanol-rich fuels. Automobile manufacturers have advised owners of older vehicles to check compatibility guidelines issued for their specific models.
Ethanol contains less energy per litre than petrol. As a result, some reduction in fuel economy is technically possible.
Studies conducted by government agencies and the automobile industry have generally found that the reduction in fuel efficiency is modest and varies depending on vehicle type, engine tuning and driving conditions.
Ethanol's tendency to absorb water is a well-established chemical property.
Fuel storage systems handling higher ethanol blends require appropriate infrastructure and maintenance to prevent contamination. Experts say the issue is related to storage and handling conditions rather than an inherent safety problem with the fuel itself.
The concerns cited in the document posted by Lamsang were linked to infrastructure readiness and fuel handling capabilities.
Why Has the Issue Become Political?
The debate around E20 has also been shaped by allegations involving Union Minister for Road Transport and Highways Nitin Gadkari, one of the government's strongest advocates of ethanol-based fuels.
Opposition parties and some social media users have alleged a conflict of interest because companies linked to members of Gadkari's family have interests in the ethanol business.
Netizens have alleged that the companies associated with Gadkari's sons, including firms involved in biofuel and ethanol production, operate in the sector that stands to benefit from increased ethanol demand.
The Congress party and other opposition leaders have repeatedly raised these business links while criticising the government's ethanol policy.
Gadkari has rejected the allegations and said he has no role in awarding ethanol contracts. He has also said that companies linked to his family account for only a small share of India's ethanol production and that criticism of E20 has, in some instances, been politically motivated.
No court or government agency has found any wrongdoing in relation to the allegations.
Even so, the issue has added a political dimension to the debate around E20 and has contributed to questions about transparency and public trust.
Govt Repeatedly Issues Clarifications
The Bhutan episode is not an isolated case.
Over the past few months, the government has repeatedly issued clarifications and fact checks on claims related to ethanol-blended petrol, including allegations regarding engine failures, reduced mileage and vehicle compatibility.
The issue affects millions of vehicle owners and involves a nationwide shift in fuel policy. Technical concerns, consumer experiences and political disputes often intersect, allowing claims and counterclaims to spread rapidly online.
The latest clarification over Bhutan shows that the debate around E20 is no longer only about fuel. It has also become a contest over information, trust and competing narratives around one of India's biggest energy-transition programmes.
