The present invention relates a surfactant composition for use as an emulsifier in water blended fuel mixture. The said composition includes ethoxylate of cashew nut shell liquid. In addition ethoxylate of cashew nut shell liquid, the said composition comprises a co-surfactant having a hydrophilic lipophilic balance in the range of 4 to 12 and a polymeric dispersant. The water blended fuel mixture using emulsifiers of the present invention, overcome some of the shortcomings of the previously known emulsions. The ethoxylate of cashew nut shell liquid is of the formula (I). ##STR00001##