Please anyone correct me if I am wrong.
My knowledge is picked from here and there.
So government has given nod few months/years back to mix ethanol with the petrol. The reasons are bla bla bla.
How does this affect the consumer?
Here is how I see it- Price of petrol is directly proportional to the price of Crude . However the price we pay for crude is not 100% Crude… it gets converted into Petroleum. Lets assume price of Petroleum=price of Crude…in that case as well what we pay from our pocket is for the cost of Petroleum whereas the product we are buying is Petrol+Ethanol . 1 litre petrol contains 80%petrol -20% ethanol approx.
Is this the right understanding of the Ethanol-petrol pricing?
Please note-I do-not want this to be a political topic.I am just here for the economics.