Why New Car Mileage Is Dropping in India: The E20 Fuel Truth

In India, the first question a car buyer asks is often, “Kitna deti hai?” (What is the mileage?). But lately, the answer has been disappointing for many. Whether you bought a shiny new SUV or a budget hatchback in the last year, you might have noticed a strange issue: the fuel meter drops faster than expected.

You are not alone. Thousands of Indian car owners are reporting a sudden drop in fuel efficiency, with some seeing a dip of 10% to 15% in their daily drive. Is it an engine fault? Is the car manufacturing quality going down? Or is it something else entirely?

The answer lies in the fuel tank. Here is a deep dive into why new car mileage is suffering in India and what you need to know.

The Main Culprit: E20 Petrol Blending

The biggest reason for the recent drop in mileage is the change in the petrol itself. The Indian government has aggressively rolled out E20 fuel—petrol blended with 20% ethanol—to cut crude oil imports and reduce pollution.

While this is great for the environment, there is a scientific trade-off. Ethanol has lower energy density than pure petrol.

• Pure petrol packs more energy per litre.
• Ethanol packs about 30% less energy than petrol.
• When you mix 20% ethanol into petrol, the overall energy of the fuel drops.
• Result: Your engine needs to burn more fuel to produce the same power, leading to lower mileage.

Official bodies like the ARAI (Automotive Research Association of India) have estimated a mileage drop of around 3-5% for E20-compliant cars. However, in real-world city driving with AC and traffic, users are reporting drops closer to 10-15%.

BS6 Phase 2 and Strict Emission Norms

Another factor is the strict BS6 Phase 2 (RDE) emission norms that kicked in fully by 2023-24. To meet these cleaner standards, carmakers had to retune engines.

• Performance vs. Economy: To keep emissions low, some engines are tuned to run “richer” (using more fuel) in certain conditions to prevent engine knocking or overheating catalytic converters.
• Particulate Filters: Diesel cars now come with DPF (Diesel Particulate Filters) which can occasionally use extra fuel to clean themselves (regeneration process), slightly impacting the average.

The Heatwave & Traffic Effect

We cannot ignore the Indian driving conditions. The years 2024 and 2025 have seen record-breaking heatwaves across North and Central India.

• AC Load: Car ACs are working overtime. An AC compressor running at full blast in 45°C heat consumes significantly more fuel than in moderate weather.
• Idling: With worsening traffic congestion in metro cities like Bengaluru, Mumbai, and Delhi, cars spend more time idling. Idling with the AC on yields 0 kmpl, drastically dragging down your trip average.

Is Your Car E20 Compliant?

This is a critical confusion point.

• New Cars (2023 onwards): Most new cars are “E20 Compliant.” Their engines are materially hardened to handle ethanol, but they still suffer the mileage drop due to the lower energy of the fuel.
• Older Cars (Pre-2023): If you put E20 petrol in an older BS4 car, the mileage drop can be even sharper. Ethanol can also be corrosive to rubber pipes and plastic seals in older engines over time.

Government Stance and What Happens Next

The Ministry of Petroleum and Natural Gas has acknowledged the lower energy content of ethanol but emphasizes the national benefit: saving foreign exchange and helping farmers.

• Price Adjustment? There has been a demand from auto experts that since ethanol-blended petrol gives less mileage, it should be sold at a cheaper rate per litre to compensate the consumer. So far, prices remain similar to standard petrol.
• Hybrid Push: This mileage drop is pushing more buyers toward Strong Hybrids (like the Grand Vitara or Hyryder) and EVs, as hybrids can compensate for fuel quality issues with electric motor assistance.

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