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Biodiesel Blending: PSU OMCs Sell Diesel With Up to 5% Biodiesel

19 October 20261 min read
ECONOMYBiodiesel Blending:PSU OMCs Sell DieselWith Up to 5%Biodiesel19 October 2026safalsetu.com

Why in the news

Public sector oil marketing companies (OMCs) have begun supplying diesel mixed with up to 5% biodiesel at some fuel stations, Business Standard reported on 18 October 2026. The step comes as high crude prices squeeze their marketing margins.

Key facts

  • Who: Indian Oil, Bharat Petroleum and Hindustan Petroleum; private retailers Nayara Energy and Jio-bp are not blending biodiesel.
  • Where: mostly Gujarat, Rajasthan and Delhi-NCR.
  • Current level: at most retail outlets, biodiesel content is still no more than 0.5%.
  • Standard: IS 1460 (BIS standard for automotive diesel) permits blends up to 5% without separate disclosure, according to the Biodiesel Association of India (BDAI).
  • Feedstock: mainly vegetable oil-based biodiesel.
  • Price: biodiesel costs about ₹88 a litre against ₹95.20 for regular diesel in Delhi-NCR.
IndicatorValue
Indian crude basket, Februaryabout $69/barrel
Indian crude basket, Octoberabout $122/barrel (up 77%)
Icra estimate of diesel under-recovery (23 September)₹9/litre
Icra estimate of petrol under-recovery (23 September)₹8/litre

About the National Policy on Biofuels

The policy was issued in 2018 by the Ministry of Petroleum and Natural Gas and amended in June 2022, when the 20% ethanol-in-petrol target was advanced from 2030 to 2025-26. It sets an indicative goal of 5% biodiesel in diesel by 2030. Ethanol blending in petrol has now reached the full 20% level, while the government has ruled out adding ethanol to diesel.

Exam angle

  • Biodiesel target: 5% in diesel by 2030; ethanol target: 20% in petrol (E20).
  • IS 1460 is the BIS standard for automotive diesel.
  • The three PSU OMCs are IOCL, BPCL and HPCL.

Test yourself

1. What is the indicative biodiesel blending target in diesel under India's National Policy on Biofuels?

The National Policy on Biofuels sets an indicative goal of 5% biodiesel blending in diesel by 2030.

2. IS 1460, cited in the biodiesel blending news of October 2026, is the BIS standard for what?

IS 1460 is the Bureau of Indian Standards specification for automotive diesel fuel.

3. Diesel with up to 5% biodiesel is being sold by PSU OMCs mainly in which regions?

Such blended diesel is mostly available in Gujarat, Rajasthan and the Delhi-NCR region.

Sources: Business Standard, IEA