India’s poorest will pay the most for ethanol-fuel push

India’s poorest citizens are bearing the brunt of the nation’s ethanol-fuel initiative, according to emerging reports and analyses highlighting the economic and environmental consequences of the policy. As the Indian government pushes forward with its Ethanol Blended Petrol (EBP) Programme, critics argue that the benefits of cleaner air and reduced oil dependence are disproportionately enjoyed by wealthier segments of society, while the costs fall heavily on the rural poor. The initiative, aimed at reducing reliance on imported crude oil and promoting cleaner transportation, involves blending ethanol, a biofuel derived primarily from agricultural crops, with petrol. According to official data released in July 2026, India’s three state-run oil marketing companies have acquired 705.43 crore litres of ethanol for the fiscal year ending June 2026, spending approximately Rs 49,577 crore. Over the past three years, these companies have collectively invested over Rs 1.72 lakh crore (around $20.6 billion) in ethanol procurement. At present, India operates 501 ethanol distilleries with combined annual production capacity nearing 16 billion litres. The government maintains that the ethanol program diverts only surplus crop stock after fulfilling food security obligations. This approach, officials say, helps conserve foreign exchange typically spent on crude oil imports and protects farmers from volatile grain prices. However, the economic reality paints a different picture. Rice, for instance, is procured by the Food Corporation of India at around Rs 44 per kg, yet it is later sold to ethanol distilleries at roughly Rs 23 per kg. This discrepancy means that public funds allocated for food security effectively subsidize fuel for private vehicles. This practice raises concerns about the broader implications of the ethanol program. Critics point to the ecological distribution conflict, a term coined by political ecologist Joan Martinez Alier, which describes situations where the benefits of a resource are concentrated among certain groups while the associated costs are borne by others. In the case of India’s ethanol initiative, the gains from reduced oil imports and improved air quality are largely reaped by urban populations, whereas the costs, such as the diversion of arable land and water resources, are felt most acutely by rural communities. Environmental and agricultural experts warn that the ethanol program could exacerbate existing inequalities. Diverting large portions of farmland to ethanol production risks straining already limited water supplies and increasing pressure on soil fertility. Additionally, the shift toward ethanol-based fuels may lead to increased demand for specific crops, potentially driving up their prices and affecting food availability for lower-income households. The Ministry of Petroleum and Natural Gas has emphasized efforts to mitigate these challenges through initiatives such as diversified feedstocks, efficient irrigation techniques, and the adoption of Zero Liquid Discharge (ZLD) distilleries. These measures aim to enhance sustainability within the ethanol sector. Despite these claims, skepticism persists regarding the long-term viability and equity of the current ethanol strategy. As the ethanol program continues to expand, stakeholders remain divided on its overall impact. While some advocate for continued investment in biofuels as part of a broader transition to renewable energy, others stress the need for policies that ensure equitable distribution of both benefits and burdens. With India’s population continuing to grow and its energy demands rising, the challenge lies in balancing environmental goals with social equity and food security.