Aug 6, 2026, (Reuters) – Consumer uncertainty over India’s transition to E20 petrol is pushing some buyers toward vehicles powered by alternative fuels, a senior industry official said on Thursday.
Sales of alternative-fuel passenger vehicles, including CNG, hybrid and electric models, came within “striking distance” of petrol models in July, according to the Federation of Automobile Dealers Associations (FADA).
These vehicles accounted for 40.59% of total sales in July, just 1.09 percentage points behind petrol-powered vehicles at 41.68%.
India’s petroleum and road transport ministries did not immediately respond to Reuters’ requests for comment.
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The shift comes amid concerns surrounding India’s nationwide rollout of E20 petrol, which contains 20% ethanol, a plant-derived alcohol mixed into petrol to reduce dependence on imported crude oil. The policy replaced the earlier E10 variant.
The transition has drawn criticism from some consumers, who say the higher ethanol blend affects fuel efficiency and vehicle performance, particularly in older vehicles not designed for E20 fuel.
“What we are seeing is more consumer queries than complaints,” Sai Giridhar, vice president of FADA, told Reuters, adding that dealers have not received a single complaint linking vehicle issues to E20 fuel despite servicing thousands of models every month.
Petrol-powered share of passenger vehicle sales fell to about 41% from 47.6% a year earlier, while diesel’s share remained largely unchanged at about 18%, Giridhar said.
As petrol’s share declined, CNG and electric vehicles gained ground. CNG’s share rose to about 24% from 21% a year earlier, while EVs accounted for nearly 8% of sales, up from about 5%, he added.
Giridhar said dealer surveys suggest some consumers are delaying purchases of petrol vehicles or exploring alternative-fuel options because of concerns around E20, fuel economy and vehicle compatibility.
He attributed much of the anxiety to misinformation and a lack of awareness, saying automakers and dealers were initially unprepared for the volume of customer queries surrounding the fuel transition.
FADA said while passenger vehicles enter August with healthy pipelines and fresh launches, clearer communication around the E20 rollout could help convert hesitant buyers.
Overall passenger vehicle retail sales rose 19.1% year-on-year to 416,555 units in July, helped by tax-cut-led demand and new model launches, FADA added.