By Zoey
The economic strain caused by the Iran conflict and disruptions to global energy supplies is increasingly being felt across India, where rising fuel prices, shortages of cooking gas and a rapid government push toward ethanol-blended fuels are reshaping daily life for millions of households.
From crowded neighborhoods in New Delhi to the busy streets of Chennai, consumers say the soaring cost of gasoline and liquefied petroleum gas, commonly known as LPG, is putting severe pressure on family budgets already stretched by inflation and high living expenses.
Ravi Ranjan, a taxi driver living in the Indian capital with his wife and young child, said the crisis has dramatically increased his household costs while reducing his earnings. Long delivery delays and supply shortages have forced many consumers to turn to unofficial sellers for cooking fuel, often at sharply inflated prices.
Ranjan said he once paid around 1,000 rupees for an LPG cylinder used for cooking in his home. Now, he says, the same cylinder costs nearly three times as much on the black market because official supplies are difficult to obtain.
“I used to get a cylinder of LPG for 1,000 rupees, now I pay 3,000 rupees in the black market,” he said. “Everything has become more expensive at the same time. Fuel for work, fuel for cooking, even transportation.”
The worsening situation comes as the government urges citizens to reduce fuel consumption in response to the energy crisis triggered by disruptions in the Strait of Hormuz, a vital shipping corridor through which much of the world’s oil and gas supplies pass. India imports nearly 90% of its crude oil, leaving the country highly vulnerable to instability in global energy markets.
Prime Minister Narendra Modi recently appealed to Indians to adopt what he described as “nationally responsible choices” by reducing unnecessary travel, using public transportation more often, carpooling and limiting foreign trips to conserve fuel and foreign exchange reserves.
But many residents say the burden of adjustment is falling disproportionately on ordinary workers and middle-class families.
In Chennai, advertising executive Sushmita Sankar said her family’s fuel expenses have risen sharply over the past year. She also expressed frustration over the widespread use of ethanol-blended gasoline, which she believes has reduced her vehicle’s fuel efficiency.
“Fuel expenses are increasing and with only ethanol mixed petrol available, I feel my car’s mileage has reduced in the last year or so,” she said. “Already our days are busy with work and taking care of our child’s school and other needs. Having to now spend a lot of time to fill my car or buy LPG is making things even more hectic.”
India has accelerated its ethanol blending program as part of a broader effort to reduce dependence on imported crude oil. Most fuel stations nationwide now sell gasoline blended with 20% ethanol after the government achieved a national rollout target years ahead of schedule.
Authorities are now considering an even more ambitious expansion. India’s transport ministry recently proposed allowing vehicles capable of operating on fuels containing 85% ethanol, or even entirely ethanol-based fuel, in what analysts describe as one of the strongest signals yet that the government intends to aggressively expand biofuel use.
The shift has intensified debate among economists, environmental experts and consumers over whether ethanol can truly provide a sustainable solution to India’s energy vulnerability.
On Friday, India increased retail prices for gasoline and diesel, further adding to public anxiety. Local media outlets reported panic buying in parts of Odisha state, where long lines formed outside fuel stations as consumers rushed to secure supplies before additional price increases could occur.
The government has also banned sugar exports through at least September in an effort to ensure sufficient domestic supplies for both food consumption and ethanol production. Sugarcane remains one of the primary raw materials used in India’s ethanol industry.
Officials argue that higher ethanol use can help lower vehicle emissions, strengthen energy security and reduce exposure to volatile oil markets. Supporters within the biofuel industry say the strategy reflects India’s long-term goal of achieving greater energy independence.
Chandra Kumar Jain, president of the Grain Ethanol Manufacturers Association, said the move toward higher ethanol blending demonstrates the government’s commitment to reducing reliance on imported fossil fuels while lowering emissions.
Energy analysts acknowledge that ethanol blending has already produced some measurable results. According to the Institute for Energy Economics and Financial Analysis, India’s 20% ethanol blend contributed to a 2.5% reduction in crude oil imports in 2025.
Still, experts warn that the rapid pace of policy changes has created uncertainty for both consumers and automobile manufacturers.
Charith Konda, an analyst with the Institute for Energy Economics and Financial Analysis, said automakers are facing growing confusion over future fuel standards and engine compatibility requirements as policymakers continue to discuss higher ethanol concentrations.
Some drivers have also complained that ethanol-blended gasoline delivers lower mileage because ethanol contains less energy than conventional gasoline. Vehicles often consume more fuel to travel the same distance, potentially offsetting some financial benefits.
Environmental experts are raising broader concerns as well.
Shyamasis Das of the New Delhi-based Centre for Social and Economic Progress said producing large quantities of crop-based ethanol could place additional strain on India’s already stressed agricultural and water resources.
Nearly 70% of India’s ethanol production currently comes from crops such as sugarcane, rice and corn. Critics argue that diverting farmland toward fuel production could reduce food supplies, increase prices for agricultural products and worsen water shortages in a country already facing groundwater depletion in many regions.
Analysts estimate that producing a single liter of ethanol can require thousands of liters of water, depending on the crop and production method. That has intensified concerns among environmental groups that aggressive biofuel expansion may create new sustainability problems even as it attempts to solve the energy crisis.
Questions also remain about how quickly vehicle manufacturers can adapt to the proposed higher ethanol blends. Experts say it may take years to fully develop compatible engines, supply chains and nationwide distribution systems capable of supporting fuels containing 85% or more ethanol.
The push toward biofuels is not limited to India.
Across Southeast Asia, governments are responding to the energy disruptions by accelerating their own biofuel ambitions. Indonesia is moving to expand biodiesel blending levels from 40% to 50% under a program championed by President Prabowo Subianto, who has described biofuel expansion as a critical step toward “energy sovereignty.”
Malaysia has also approved plans to gradually increase biodiesel content in transportation fuels, with authorities studying the possibility of raising blending levels further in the future.
However, environmental organizations warn that rapid expansion of biofuel crops such as palm oil could contribute to deforestation and land clearing unless carefully regulated.
While governments across Asia increasingly view biofuels as protection against future oil shocks, some analysts argue that electric vehicles and renewable energy infrastructure may ultimately provide a more effective long-term solution.
Konda said transitioning transportation and industry toward renewable electricity rather than relying heavily on crop-based biofuels could prove more sustainable over time, particularly as concerns grow over water consumption, food security and land use.
Das added that the environmental benefits of biofuels depend heavily on how they are produced. He said fuels derived from agricultural waste, municipal waste and used cooking oils are likely to offer greater sustainability benefits than those requiring large-scale cultivation of dedicated crops.
“If the biofuel is not sourced from residues or waste, they are not usually treated as renewable,” he said.
For now, however, millions of Indian consumers continue to grapple with rising costs and uncertainty as the global energy crisis triggered by the Iran conflict ripples through household budgets, transportation systems and the wider economy.
Original article
Comments