India seeks to cool war’s oil burn with flex-fuel shift

India is preparing a nationwide push to accelerate the adoption of flex-fuel vehicles (FFVs) that can run on ethanol blends of up to E85 -- comprising 85% ethanol and 15% petrol -- as rising geopolitical tensions and oil market volatility sharpen the focus on reducing India’s dependence on crude imports, according to a Mint report citing people familiar with the matter.

The move marks a potential shift beyond the current 20% ethanol blending mandate rolled out in 2025, which had drawn consumer complaints over reduced mileage and concerns around engine performance.

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Officials in the Union petroleum and natural gas ministry are scheduled to meet on Monday to review a roadmap prepared by a working group. “During the meeting, a presentation will be made by the working group constituted for preparing the plan for the rollout of FFVs,” one of the people cited above said, requesting anonymity.

As per the report, the working group includes representatives from oil marketing companies, automobile manufacturers, and government departments. Its recommendations will be presented to senior executives of state-run oil firms, members of the Society of Indian Automobile Manufacturers (SIAM), and officials from key ministries.

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The policy push comes against the backdrop of heightened uncertainty in global oil markets. Crude prices have remained volatile amid ongoing tensions in West Asia, briefly crossing the $100-per-barrel mark before easing following a ceasefire. However, concerns over renewed disruptions continue to linger.

Recent developments in the Strait of Hormuz have further intensified concerns. The ministry of ports, shipping, and waterways indicated that two vessels were forced to return to the Persian Gulf after reporting a firing incident while exiting the strategic passage.

With the transport sector accounting for a substantial share of petrol consumption, policymakers are increasingly viewing fuel diversification as critical to energy security.