E85 is here in Delhi at Rs 82.12 per litre, well under the Rs 102 you’d put down for E20. Don’t be fooled by the headline figure though; it doesn’t always hold up when you do the per-kilometre math. And now that E100 has been given the nod, we may be in for a new kind of pricing soon.
The way I see it, the only thing that matters is this: for every rupee, which one will put more miles on the clock? It’s not about what the pump says.
The per-km reality behind cheaper pumps
Ethanol is not as potent as petrol. You’re looking at a 20-30% hit to your fuel economy with a high-ethanol mix, depending on how your car is set up.
Let’s say you have an ordinary petrol car that gives you 18 kmpl on E20. At Rs 102 a pop, you are spending Rs 5.67 for every kilometre. Put some E85 in and you might be down to 13 or 14 kmpl. Do the numbers with 13.5 kmpl and the Rs 82.12 rate and you are out Rs 6.08 per kilometre.
In other words, E85 can be a bit of a false economy. An industry report from a while back put it plainly: if you want people to switch to higher ethanol blends, you have to make them efficient enough to justify it.
Delhi price ratio and what it implies
Right now in Delhi, E85 is running at 80 per cent of what E20 is. With the former at Rs 82.12 and the latter at Rs 102, it’s not quite there yet for the average motorist to see a real advantage.
Some would have you believe E85 has to come in at the Rs 70-72 mark to be any good value. For now, the numbers on the page point to E20 being the better deal for running costs.
Then again, two things could put a dent in that:
– A steep drop in the cost of ethanol versus petrol
– Or a run-up in global crude that leaves ethanol in the dust
Should crude go up, petrol will follow suit and outpace home-made ethanol. That’s the kind of buffer some in the know think India needs.
E100 enters the frame
We have the green light for E100 flex-fuel. Since it is 100 per cent ethanol, its price isn’t at the mercy of the same crude oil fluctuations as petrol.
Union Minister Nitin Gadkari has put a figure on it – around Rs 60. Most expect to see it in the Rs 62 to 68 range. Just remember, only a flex-fuel vehicle can handle E100; put it in anything else and you could be looking at a ruined engine.
This is all part of a plan that includes E22, E25, E27, E30, E85 and E100. The government made a point of rolling out E85 in Delhi at Rs 82.12 last week. It is a good Rs 20 under the E20, which is at Rs 102.12 in the capital.
If you look past the price at the station, there are some policy wins to be had with these blends:
– We don’t have to rely as much on imported crude
– More money in the pockets of farmers and producers
– A smaller carbon footprint
– A more secure energy position for the country
Bottom line for buyers
When you add it up in today’s Delhi, the story is plain. My example car runs you to the tune of Rs 5.67 a kilometre on E20 (18 kmpl) and Rs 6.08 on E85 (13.5 kmpl). A lower price per litre is no guarantee you’ll be saving money.
Keep an eye on where crude is heading, and any word on E100. If E85 gets to be near Rs 70-72 or E100 comes in at the figures they are talking about, the whole per-kilometre dynamic could shift in a hurry.
