Centre removes excise duty on petrol with up to 30 pc ethanol blending
New Delhi, June 11
The government has exempted petrol blended with higher levels of ethanol from excise duty, including fuel variants containing 22 per cent, 25 per cent, 27 per cent and 30 per cent ethanol, according to a notification issued by the Ministry of Finance on Thursday.
As per the notification, excise duty has been set at nil for ethanol-blended motor spirit conforming to Bureau of Indian Standards specifications, covering blends where ethanol content ranges from 22 per cent to 30 per cent by volume.
The exemption has been granted under Section 5A of the Central Excise Act, 1944, it said.
The revised structure includes E22, E25, E27 and E30 petrol, defined as mixtures of motor spirit (petrol) and ethanol in specified proportions, with applicable central, state, Union Territory or integrated taxes on ethanol and duty-paid petrol components.
The amendment follows India's push to expand ethanol blending in petrol as part of its broader biofuel policy aimed at reducing crude oil imports and promoting domestic renewable fuel usage.
The government has steadily increased ethanol blending levels in petrol in recent years, supported by policy changes under the National Policy on Biofuels and corresponding targets advanced to 2025-26.
In a separate development, the government recently launched E85 fuel for compatible flex-fuel vehicles.
Union Petroleum and Natural Gas Minister Hardeep Singh Puri has highlighted India's progress in ethanol blending, noting that the share of ethanol in petrol has risen from 1.5 per cent in 2014 to 10 per cent in June 2022, with the 20 per cent blending target achieved ahead of schedule.
"From 2014 until now, we have increased ethanol blending from 1.5 per cent to 10 per cent, which was achieved in November 2022. Our target was to achieve 20 per cent blending by 2030, but we completed it in 2024 itself," Puri said.
— IANS
Reader Comments
👏 Finally some proactive policy! Our sugar mills will benefit too. But I'm concerned about food vs fuel debate. Hope this doesn't divert too much sugarcane from food production. Need careful balance.
Great to see India leading in renewable fuel adoption. The excise duty exemption will make these blends cheaper for consumers. This is exactly what we need to combat climate change and reduce pollution in cities like Delhi.
Good intentions, but implementation is key. My car's manual says ethanol blends above E10 can damage engines. Will the government ensure vehicle compatibility first? Otherwise this is just a paper policy. Also, what about fuel efficiency? Ethanol gives lower mileage.
My father is a farmer in Maharashtra and this is good news for sugarcane growers. But the real challenge is water usage - sugarcane needs lots of water. In drought-prone areas, this could create problems. Need more research on water-efficient ethanol sources like grain-based ethanol.
Impressive progress from 1.5% to 20% ethanol blending in just 10 years! 🚀 This excise duty exemption will accelerate adoption further. However, I hope the tax revenue loss is offset by savings from reduced oil imports. Need transparent accounting.
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