Biodiesel Blending: PSU OMCs Sell Diesel With Up to 5% Biodiesel
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.
| Indicator | Value |
|---|---|
| Indian crude basket, February | about $69/barrel |
| Indian crude basket, October | about $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.