Over the years, due to the surge in energy demand, the use of alternative fuels has emerged as an interesting area of research. In the current work, a comparative study was conducted by employing gasoline, 6% ethanol−gasoline (E6), and 12% ethanol−gasoline (E12) in a spark-ignition engine. Performance, emissions, and lube oil damage tests were conducted at a constant load by varying engine speed. E12 showed improved performance, i.e., 7.82% higher torque and 14.69% improved brake thermal efficiency (BTE) in comparison with neat gasoline. In addition, CO, CO2, HC, and NOx emissions were found to be minimal for E12. Furthermore, lubricating oil properties (kinematic viscosity, flash point, and total base number (TBN)) and wear debris (iron, aluminum, and copper) showed a visibly improved performance with gasoline compared to E6 and E12. The highest decline in kinematic viscosity of 27.87%, compared to fresh oil, was recorded for E12. Thus, the lube oil properties have to be modified according to the chemical properties of the alternative fuel.