Stakeholders from Nepal’s auto and energy sectors are urging the government to introduce ethanol-blended petrol gradually, instead of pushing straight to E10 nationwide.
Vehicle compatibility concerns
Indian fuel expert Dr Balraj Bhanot said many vehicles currently running in Nepal are not designed for ethanol-blended petrol, especially older models. Using blended fuel in such vehicles could cause engine issues, fuel leakage, starting problems and a 5–6% drop in mileage. He recommended separate fuel options and even dedicated pumps for non-compatible vehicles.
Bhanot warned that if water enters ethanol-blended petrol, phase separation can occur, with ethanol settling at the bottom of the tank and potentially harming the engine. He said petrol stations should carry out regular fuel quality checks using simple testing tools.
Start with low blending levels
Bhanot suggested Nepal begin with a lower ethanol percentage, pointing out that India started with 5% ethanol in petrol in 2006, moved to 10% in 2010 and is now at E20. He said rapidly increasing ethanol levels could damage rubber and other parts in older fuel systems.
Demand, supply and pricing
Automobile entrepreneur Aakash Golchha, founder of NAIMA, said vehicle compatibility and market demand must drive the policy. Most Indian vehicles built after 2010 can use E10, but Nepal also imports models from other countries that may not accept blended fuel. He backed offering both blended and pure petrol so owners of older or incompatible vehicles can avoid extra maintenance costs.
Golchha estimated Nepal can currently produce only 20–25 million litres of ethanol annually from molasses from sugar factories. To boost local production, he sought clear pricing, long-term purchase contracts and regular quality audits.
Raw materials and alternatives
Outgoing JAAM president Sagar Gajurel said ethanol blending has been discussed in Nepal for around two decades and can help cut petrol use, but questioned whether raw material supply is sufficient for large-scale ethanol production.
He noted that molasses from sugar mills is the main current feedstock, while alternatives like Napier grass, straw, corn stalks and wheat husks could be explored, though processing these remains technically challenging.
Gajurel said the policy must be assessed from the consumer’s perspective. Older vehicles may see no real benefit from E10, with possible lower mileage and technical problems, even though ethanol can help reduce tailpipe emissions. He added that the economic gain depends on ethanol’s price; if ethanol is more expensive than petrol, the advantage of blending shrinks.
Nepal Oil Corporation’s plan and import impact
Nepal Oil Corporation has announced a plan to initially blend 10% ethanol into petrol, aiming to cut fuel imports.
Suresh Shrestha, chief of the Vehicle Testing Office, said E10 could reduce petrol imports by about 10% and support agriculture-based industries and new economic activity through domestic ethanol production and blending.
He called for a detailed cost analysis before deciding whether Nepal should import already blended fuel or blend petrol and ethanol domestically, so that both consumers and producers benefit from the transition.
Writes on vehicle pricing, taxation and the Nepali auto market from ongoing tracking of distributor price lists. Editorial policy.
