Ethanol May Soon Replace LPG in Some Indian Kitchens; Govt Eyes New Policy by September

India may soon take another step towards cleaner and more diversified energy use at home. The Ministry of Petroleum and Natural Gas is reportedly working on a policy framework to introduce ethanol as a mainstream cooking fuel, alongside liquefied petroleum gas (LPG). The proposed policy is expected to outline subsidies, supply-chain development and distribution mechanisms to encourage household adoption.

According to news reports, the framework could be ready by September, with discussions currently underway between the government, oil marketing companies (OMCs) and industry bodies. If implemented, the move could help reduce India's dependence on imported LPG while making productive use of the country's surplus ethanol production.

Govt May Offer Subsidies to Promote Ethanol Cooking

The proposed policy is expected to focus on making ethanol-based cooking an affordable alternative for households. Officials are reportedly evaluating subsidy models that could either provide one-time financial support for purchasing ethanol stoves or offer ongoing incentives to encourage adoption.

The initiative follows pilot testing of ethanol-powered cooking stoves, which began earlier this year at the government's direction.

To improve accessibility, OMCs are also exploring the rollout of ethanol dispensing stations or "ethanol ATMs" at fuel retail outlets. Consumers could purchase ethanol in canisters to refill compatible cooking stoves, creating a distribution network similar to existing fuel infrastructure.

Surplus Ethanol Capacity Could Drive the Shift

India currently has an annual ethanol production capacity of more than 20 billion litres, with an additional 4 billion litres expected to be added during the current financial year.

While around 11 billion litres are utilised under the government's E20 petrol blending programme and another 3-3.5 billion litres are consumed by industries such as pharmaceuticals, liquor and chemicals, nearly 7 billion litres of production capacity remains underutilised.

Using ethanol as a cooking fuel could help absorb this surplus while reducing the country's LPG import bill. Industry experts also believe the excess capacity could support ethanol exports to neighbouring countries such as Nepal, Bangladesh and Indonesia, where ethanol blending programmes are expanding.

Why Ethanol Matters for India's Energy Security

The proposal comes at a time when India is seeking to strengthen its energy security. Recent geopolitical tensions in West Asia highlighted the country's dependence on LPG imports, much of which passes through the strategically important Strait of Hormuz.

Expanding the use of domestically produced ethanol could reduce exposure to global supply disruptions while supporting India's clean energy transition.

A report by the International Institute for Sustainable Development estimates that shifting to cleaner cooking solutions such as electric cooking and biogas could help India save over ₹2 lakh crore in cumulative LPG subsidies by 2050, highlighting the long-term economic benefits of diversifying cooking fuels.

Conclusion

If approved, the proposed ethanol cooking policy could mark a significant shift in India's household energy landscape. By leveraging surplus ethanol production, reducing reliance on imported LPG and strengthening domestic energy security, the initiative has the potential to benefit consumers, the agriculture sector and the broader economy. While the policy details are still being finalised, it signals the government's growing focus on expanding the role of cleaner, home-grown fuels in everyday life.

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