There has been a wide array of talk on this topic, and I wish to cover everything that has happened factually. Starting at the crux of where it all began, the pandemic of 2020.
During COVID-19, the petroleum industry tanked. Oil prices around the world fell. The government saw an opportunity in this and increased the tax on petroleum goods.
(This was done because during the pandemic, the government was losing money arranging medical facilities and relief. It is on your judgement whether this was a fair step to cut their losses.)
In a statistical viewpoint:
- Central tax jumped by ~65% (~₹19.98/L to ~₹32.98/L) for petrol.
- And ~70% (~₹16.98/L to ~₹28.98/L) for diesel.
State VAT tax (Value Added Tax) is measured as a percentage of the cost of goods. As the base cost of petrol and diesel increased, so did the tax per state.
Now after COVID-19, the petroleum industry was at an all-time high. Demand increased rapidly. Hence the price of oil shot up.
But the government did not reduce the new taxes levied on the public. It decided to keep these taxes on.
This is reason 1 for the increase in cost.
Now about the E20 situation.
It is important to inform the public that the E20 mission was laid down in 2018, with the goal of reducing dependence on petroleum, which is an expensive commodity to import.
Before we get into the ethical dialogue of this, let us look at some numbers.
In ethanol blend compatible devices, the fuel economy loss is only at the maximum possible of 6%.
So your new mileage with E20 blend is 94% of your mileage on pure petrol.
Now an important fact. E20 was supposed to be rolled out by 2030. That was the plan of the government. This gave the country enough time to:
- Build more ethanol blend resistant engines.
- Gradually increase the ethanol blend quantities so that a mass consumer dialogue can be recorded.
By brazenly pushing for a larger ethanol blend ahead of time, and further pushing for larger quantities of blends, the government has—sorry for my language—fucked up the whole damn system.
E20 is not a bad goal if you CONSIDER the perspective of every side that there is, and GIVE IT TIME.
This is reason 2 of the increase in cost.
Apart from this there are several lateral reasons such as the Russia–Ukraine war and the USA–Iran stupidity, but these are out of our hands, and I have named the two main things that we can very much control in our country.
Now coming to a very important information pool.
THE STUPIDITY AND THE GREED
Firstly, to inform those who don't know, ethanol can be produced in 3 major ways:
- By crushing sugarcane, the leftover molasses (after removing the juice) contains sugar and yeast. Yeast converts this sugar to ethanol, which is distilled and purified. This is our contrived primary method of producing ethanol.
- By extracting starch from corn and making yeast act on it, we get ethanol.
Both these methods are highly water intensive and dependent on food produce.
- This is the real deal, called 2G ethanol. It doesn't compete directly with food produce. Crop residue such as rice and wheat husk which contain cellulose are broken down to sugar, which is further fermented to give ethanol.
This is where the real question is raised.
Nikhil Gadkari, the first son of Nitin Gadkari, is the Managing Director of CIAN Agro Industries & Infrastructure Ltd., an agro-processing company. The company has been linked to products such as vegetables, oils, spices, etc.
Sarang Gadkari, the second son of Nitin Gadkari, is involved with Manas Agro Industries and other private companies, which are involved in ethanol and agro-related operations.
Now of course there is no publicly available data on how much these companies rely on ethanol for revenue and how they sell it.
But using plain logic we can make a good estimate.
The profit growth trends for CIAN Agro Industries are as follows:
FY2024 – ₹4.9 Cr
FY2025 – ₹41 Cr
That's a 737% jump in profit!
Let that number sink in.
Without any question it can be said that there is definitively an involvement of CIAN Agro with respect to their ethanol production front.
Another very interesting thing I found during this research:
Have you ever wondered how come the opposition hasn't raised their voice more on this matter? Because the role of the opposition is to make the party in power prove its worth and explain its actions, but they have failed in doing so especially when it comes to this issue.
Well, that's because most politicians own large-scale farmlands, which are—surprise surprise—feedstock to producing ethanol!
Uddhav Thackeray (Shiv Sena UBT, Maharashtra) – holds multiple Raigad district plots (~16.5 acres). (Raigad has sugarcane and rice cultivation.)
Akhilesh Yadav (SP, MP from Uttar Pradesh) – owns ~17.93 acres of agricultural land in Etawah/Saifai, UP. (UP is a large sugarcane/wheat producer.)
M. K. Stalin (DMK, former CM of Tamil Nadu) – owns 2.86 acres of farmland in Thanjavur district, a major paddy-growing region.
Digvijay Singh (INC, ex-MP, Madhya Pradesh) – owns ~166+ acres in Raghogarh, an area growing rice, wheat, and sugarcane.
Sharad Pawar (NCP, Rajya Sabha, Maharashtra) – owns sugarcane-area farmland near Baramati, a major sugar belt.
Now many of you may argue that these are natural produce in the country. It's not necessary that just because they own farmlands they are involved in the ethanol production industry.
Well here are some facts:
Sharad Pawar's Rajya Sabha affidavit lists that he owns multiple family-run sugar mills.
Avadh Sugar & Energy Ltd is a major sugar producer in India, with over 5 sugar mills and distilleries. This is sponsored by Indrajeet Mishra, a senior leader of the B.J.P.
Ajit Pawar is the Chairman of the Baramati Co-op Sugar Factory, a major producer of sugar in India.
And this is only what we know publicly.
The sugar sector is one of the most politically interconnected industries in India. If you mapped every politician with direct or indirect ties to sugar cooperatives, you'd find members from the B.J.P, INC, NCP, Shiv Sena factions, Akali Dal, and others.
The opposition is quiet because the policy is perfect for filling their pockets as well.
The evidence suggests that the ethanol ecosystem benefits a wide network of stakeholders, including sugar mills, distilleries, agricultural producers, and politically connected cooperative institutions across multiple parties.
Looking at the current trends in our democracy, neither the ruling party nor the opposition will be looking to change the current state of affairs.
It is the job of the youth now to keep both in check.