New Delhi, July 10 -- Close on the heels of Union ministers Hardeep Singh Puri and Nitin Gadkari acknowledging that ethanol-blended petrol could indeed reduce vehicle mileage by 3-5%, triggering fresh questions over the economics of the programme, the petroleum ministry on Friday mounted an expansive defence of the country's ethanol blending initiative.

In a statement, the ministry argued that E20, or 20% ethanol-blended, petrol costs more to produce than the pure one, so it cannot be sold cheaper. The ministry also cited benefits for farmers, energy security, and evidence from global and domestic experience.

"Today, the Government purchases ethanol at remunerative prices so that Indian farmers are fairly compensated. Take maize-based e...