Blending ethanol with fuel raises the octane number of petrol. Petrol prices can be lowered if OMCs pass on the gains.
Petrol is a product of fractional distillation of crude oil, with further treatment, including addition of multi-function additives, to enhance its octane rating and other properties. A higher octane number means engines can burn the same amount of petrol to extract more energy.
The standardised octane number for petrol in India is 91. The cost of additives required to achieve this rating is built into the price of petrol. At present, splash blending of ethanol without changing the octane level at the refinery increases the octane rating by 2 excessive points,.