Indian Oil, BPCL and HPCL Sell Diesel Blended With Up to 5% Biodiesel

State-run oil marketing companies in India have begun supplying diesel blended with up to 5% biodiesel at selected retail outlets, according to a report published by Hindustan Times on October 18, 2026. The companies involved are Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL). Industry sources cited in the report said the biodiesel content varies from around 0.5% to 5%, depending on availability. Some dealers also showed invoices identifying supplies as B2 and B5, referring to diesel blends containing 2% and 5% biodiesel, respectively.

The development comes as tensions in West Asia push international oil prices higher and India’s public-sector fuel retailers continue to hold regular retail diesel prices steady. The move has also raised questions among dealers about how they can verify the exact blend when mixing takes place upstream. Experts quoted in the report expect B5 and lower biodiesel blends to have minimal or negligible effects on diesel-engine performance. However, the reported supply at selected outlets should not be confused with a nationwide 5% blending rate: India’s national biofuel policy has an indicative target of 5% biodiesel blending in diesel by 2030.

Key Takeaways

• Blending range: Selected retail outlets are reportedly receiving diesel containing approximately 0.5%–5% biodiesel.
• Companies involved: Indian Oil, BPCL and HPCL are the state-run oil marketing companies identified in the report.
• Not a nationwide 5% blend: The reported percentages vary by location and fuel batch.
• Policy target: India’s national biofuel policy envisages an indicative 5% biodiesel blending target for diesel by 2030.
• Dealer concerns: Some dealers question how they can independently verify blending percentages when mixing occurs upstream.
• Engine impact: Experts cited by Hindustan Times expect B5 and lower blends to have minimal or negligible effects on engine performance.
• Market context: High international oil prices are increasing pressure on fuel retailers, particularly public-sector companies holding retail prices steady.

What Is Happening With Diesel Blending in India?

Biodiesel is a renewable fuel that can be produced from sources such as used cooking oil, certain vegetable oils, non-edible oilseeds and animal fats. It can be blended with conventional petroleum diesel for use in diesel engines, subject to applicable fuel standards and blending requirements.

The latest report says state-run oil marketing companies are supplying different biodiesel blends at certain locations rather than introducing one uniform formulation across their entire retail networks.

The terminology used to identify these blends is straightforward:

Blend designation	Meaning
B2	2% biodiesel and approximately 98% conventional diesel
B5	5% biodiesel and approximately 95% conventional diesel
B10	10% biodiesel and approximately 90% conventional diesel

These designations describe the proportion of biodiesel in the fuel mixture. They do not indicate the fuel’s octane rating or the percentage of ethanol, which is a different biofuel commonly blended into petrol.

According to Hindustan Times, a survey of selected outlets in Karnataka and Uttar Pradesh found that pumps did not explicitly display the biodiesel percentage on the regular diesel dispensers. Some dealers reportedly showed invoices referring to B2 and B5 supplies.

The findings indicate that different blends are reaching some retail locations, but they do not establish the precise percentage used at every outlet or the average blend across India’s diesel market.

Why Are Oil Companies Increasing Biodiesel Use?

The reported development comes amid elevated international oil prices linked to tensions in West Asia. India imports more than 88% of the crude oil it processes, leaving the domestic energy market exposed to disruptions in international supply and changes in global prices.

Higher crude prices can increase the cost of producing conventional diesel. They can also raise transportation, refining and other operating expenses across the petroleum supply chain.

Public-sector oil marketing companies face an additional challenge when retail prices remain unchanged despite rising international costs. In such circumstances, the gap between procurement costs and the prices charged to consumers can put pressure on their marketing margins.

A dealer quoted by Hindustan Times suggested that biodiesel blending could be part of the industry’s response to this difficult environment. However, the report does not establish that the blending changes were introduced solely because of the West Asia crisis, and the oil companies and petroleum ministry had not responded to the publication’s queries.

Biodiesel can help diversify fuel sources and reduce reliance on petroleum diesel. Its commercial usefulness, however, depends on availability, feedstock prices, production capacity, fuel quality and the economics of blending.

The latest development therefore sits at the intersection of two issues: India’s long-term effort to expand biofuel use and the immediate financial pressures affecting the fuel market.

India’s Biodiesel Blending Target Is 5% by 2030

India’s National Policy on Biofuels envisages an indicative target of 5% biodiesel blending in diesel by 2030. The government has also encouraged biodiesel production and procurement, including the use of used cooking oil and other eligible feedstocks.

This target is separate from the country’s ethanol-blending programme for petrol. India advanced its target of 20% ethanol blending in petrol to the 2025–26 ethanol supply year, while the indicative biodiesel target remains 5% by 2030.

The distinction matters because the two programmes involve different fuels, production pathways and vehicle applications.

Biofuel programme	Indicative policy target	Fuel
Ethanol blending	20%	Petrol
Biodiesel blending	5% by 2030	Diesel

Source: Ministry of Petroleum and Natural Gas. Targets are policy objectives and should not be interpreted as evidence of current nationwide blending rates.

Actual biodiesel adoption has been constrained by the availability and cost of suitable feedstocks. In earlier government disclosures, biodiesel blending remained low, and availability was identified as a challenge.

Indian Oil’s website previously reported average biodiesel blending of approximately 0.57% during the April 2024–February 2025 period. That historical figure provides context, but it should not be treated as the current national average for October 2026.

The latest reported B2 and B5 supplies at selected locations could indicate higher blending in particular batches, but more comprehensive and current data would be needed to determine the national average.

Dealers Raise Questions About Blend Verification

One of the main concerns highlighted in the report relates to responsibility for checking fuel quality.

When biodiesel is blended at an upstream facility, a retail dealer may receive fuel that has already been mixed. Dealers have questioned how they can independently confirm the biodiesel percentage in each batch if the blending process takes place elsewhere in the supply chain.

The concern is particularly relevant when invoices identify different blends but the retail outlet does not display the percentage on its dispensers.

Fuel quality and compliance depend on clear specifications, reliable documentation, appropriate testing and accountability at each stage of distribution. If a dealer is expected to meet particular requirements, the process must also provide a practical way to establish that the delivered fuel complies with those requirements.

The issue is not simply whether biodiesel blending is permitted. It is whether the blend delivered to a pump can be identified and verified consistently.

The report said IOC, BPCL, HPCL and the Ministry of Petroleum and Natural Gas had not responded to its queries at the time of publication. Consequently, the precise verification process being used for the reported batches was not publicly clarified in that coverage.

For consumers, transparent fuel specifications and effective quality controls are important regardless of whether diesel is blended with biodiesel.

Will Biodiesel-Blended Diesel Affect Vehicle Performance?

The effect of biodiesel on a diesel engine depends on the blend percentage, fuel quality, engine design and manufacturer specifications.

Experts quoted by Hindustan Times said B5 and lower blends could have minimal to negligible effects on diesel-engine performance. Such low-level blends are commonly used in markets where the relevant fuel standards and vehicle compatibility requirements permit them.

However, that assessment should not be interpreted as a universal guarantee for every vehicle or fuel formulation. Different manufacturers may specify different requirements, and older vehicles or particular equipment may have more restrictive recommendations.

Drivers should consult their vehicle’s owner’s manual or manufacturer guidance if they have concerns about biodiesel compatibility. Commercial operators running large fleets may also need to consider equipment warranties, maintenance requirements and fuel-quality documentation.

It is also important to separate engine compatibility from fuel economy. The available report does not provide controlled testing showing whether the specific blends being sold at Indian outlets change mileage, emissions or maintenance requirements.

Without such data, it would be premature to claim that drivers will experience a measurable reduction in mileage or that every vehicle will perform identically on the reported blends.

What Does This Mean for Diesel Prices?

Biodiesel blending does not automatically translate into lower prices at fuel stations. The final retail price depends on crude oil prices, refining and procurement costs, taxes, distribution expenses and the pricing decisions of oil marketing companies.

The immediate pressure in India’s fuel market comes from the difference between elevated international prices and the prices charged at public-sector retail outlets.

A report by Indian Express on September 24 cited ICRA estimates that oil marketing companies were losing approximately ₹9 per litre on diesel sales, ₹8 per litre on petrol sales and around ₹300 per domestic LPG cylinder at that time. Those estimates reflect the situation reported in September and should not be treated as verified loss figures for October 18.

Blending biodiesel may support diversification of the fuel supply, but the available reporting does not establish how much it reduces the overall cost of diesel supplied by public-sector retailers.

Consumers should therefore not assume that biodiesel blending means prices will fall, or that a particular blend guarantees a specific retail price.

The Bigger Picture

The reported supply of B2 and B5 diesel at selected Indian outlets highlights the growing relevance of biofuels as the country manages both long-term energy-transition objectives and short-term oil-market pressures. Biodiesel can diversify fuel sources and support the use of eligible renewable feedstocks, but its expansion depends on reliable supply, competitive production costs and effective quality control.

The report also raises a practical question about transparency. When fuel is blended upstream, dealers need clear documentation and workable verification procedures, while consumers benefit from confidence that the fuel meets applicable standards. The reported developments do not establish a nationwide 5% blend, and current national data will be needed to assess progress toward India’s 2030 target.

Looking Ahead

The next important developments will be clarification from the oil marketing companies and petroleum ministry about blending practices, fuel-batch documentation and the process dealers should use to verify compliance. More detailed data would also help establish whether the higher blends reported at selected outlets are isolated cases or part of a broader increase in biodiesel use.

For drivers, the practical priority is to follow manufacturer recommendations and purchase fuel through authorised outlets. For policymakers, the challenge is to expand biodiesel availability while ensuring consistent fuel quality, transparent compliance and a clear distinction between reported local blending levels and national policy targets.

Frequently Asked Questions

1. Are Indian petrol pumps selling diesel with 5% biodiesel?

According to Hindustan Times, some selected outlets are receiving blends ranging from approximately 0.5% to 5%. This does not mean all diesel sold in India contains 5% biodiesel.

2. Which companies are supplying biodiesel-blended diesel?

The report identifies Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation as the state-run oil marketing companies supplying blends at certain locations.

3. What does B5 diesel mean?

B5 means the fuel contains 5% biodiesel blended with approximately 95% conventional petroleum diesel.

4. Why is India promoting biodiesel blending?

Biodiesel can diversify energy sources, reduce dependence on petroleum diesel and create potential uses for eligible feedstocks such as used cooking oil. India’s national biofuel policy has an indicative 5% biodiesel blending target for diesel by 2030.

5. Can biodiesel-blended diesel damage a vehicle’s engine?

Experts quoted in the report expect B5 and lower blends to have minimal or negligible effects on diesel-engine performance. Compatibility still depends on the vehicle, fuel quality and manufacturer’s specifications, so owners should check their vehicle manuals.

6. Will biodiesel blending reduce diesel prices?

Not necessarily. Retail diesel prices depend on several factors, including international oil prices, taxes, distribution expenses and oil companies’ pricing decisions. The report does not establish that the blending changes will directly lower pump prices.