Amid West Asia tensions, State-run oil marketing companies selling up to 5% blended diesel

Dealers question how they can verify blends made upstream, while experts expect little impact on engine performance.

State-run refiners are selling up to 5% biodiesel blended diesel in certain retail outlets in the country depending on availability even as international fuel prices have zoomed because of the war in West Asia, forcing private pumps to raise petrol and diesel rates.

Under the Ethanol Blended Petrol (EBP) programme, ethanol blending already reached 20% in 2025-26 as the country achieved the E20 target five years ahead of schedule. (AFP/File)

State-owned oil marketing companies (OMCs) Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) are now supplying blended diesel in certain locations , an industry executive said on condition of anonymity. The percentage of biodiesel ranges between 0.5% and 5% (B5), this person added.

Biodiesel blending policy and reported rates

India’s national policy on biofuel, released 2022, envisaged a target of 5% biodiesel blending in diesel by 2030.

A random survey of petrol pumps across Karnataka and Uttar Pradesh (UP) confirmed that no retail outlet explicitly displayed the quantity of biodiesel blended in the regular diesel, but some dealers confirmed the development, showing invoices mentioning blends in the range of B2 and B5 on strict confidentiality, fearing reprisal.

One Uttar Pradesh -based dealer raised concerns on X regarding implementation of blending-related compliances under the marketing discipline guidelines (MDG). “A critical compliance question for OMCs and authorities: If the MDG places responsibility on the dealership to verify blending parameters, how is a dealer expected to independently verify the prescribed blending percentage in high-speed diesel (HSD), particularly when blending is carried out upstream?” Hemant Sirohi asked on the platform.

He reiterated the same point to HT.

An executive with an OMC said biodiesel blending is as per the approved National Policy on Biofuels (NPB) and average nation-wide blending is around 0.5% only. “With a procurement of around 200 million litres of biodiesel during the period April 2024-February 2025, Indian Oil has achieved an average blending of 0.57% of biodiesel in diesel,” the Indian Oil Corp website claimed.

Fuel blend impacts and market pressures

Under the Ethanol Blended Petrol (EBP) programme, ethanol blending already reached 20% in 2025-26 as the country achieved the E20 target five years ahead of schedule. The aggressive E20 programme, however, raised public concerns about vehicle compatibility, reduced mileage and consumer choice for E10 and pure petrol.

Experts, who did not wish to be named, said B5 and lower biodiesel blends could have minimal to negligible impact on diesel engine performance.

Some dealers said that biodiesel doping in diesel in certain locations is now more than the national average of 0.57% as was claimed by IOC. They also showed invoices from OMCs that mentioning HSD-BSVI-B5 and HSD-BSVI-B2. BSVI is Bharat Standard VI and B2 or B5 are percentage of biodiesel mixed in the particular batches of HSD supplied by OMCs to these pumps for retail sale.

IOC, BPCL, HPCL and the ministry of petroleum did not respond to queries.

A Delhi-based fuel dealer who asked not to be named said it is also not clear whether biodiesel blended in diesel is extracted from plants (jatropha and karanjia) or animal waste.

But another dealer saw the logic of blending. “International oil prices are soaring. Private companies have recently raised petrol and diesel rates by ₹5 and ₹3 per litre. Public sector OMCs are, however, holding petrol and diesel prices even at a loss, which is a double-whammy. Consumer demand is shifting from private retail outlets to pumps of IOC, BPCL and HPCL, thereby, accelerating their losses ,” this dealer added on condition of anonymity.

India imports more than 88% of crude oil it processes. Even as India’s average crude oil import price jumped by over 13.4% to $122.33 a barrel on October 13 from $107.84 on May 25 (when public sector fuel retailers last raised fuel rates), state-run OMCs are holding petrol and diesel prices. They sell petrol at ₹102.12 per litre in Delhi and diesel at ₹95.20.