Government exempts higher ethanol-blended petrol from excise duty

The government has granted excise duty exemption on petrol containing 22-30 per cent ethanol, supporting cleaner fuel adoption and the next phase of India's ethanol blending programme

The Centre has exempted petrol blended with higher proportions of ethanol from central excise duty, a move aimed at promoting the use of cleaner fuels and accelerating the country's ethanol blending programme.

 

According to a notification issued by the Department of Revenue on Wednesday, petrol containing 22 per cent to 30 per cent ethanol will attract nil excise duty.

 

The notification inserts separate entries for E22, E25, E27 and E30 petrol blends and prescribes a nil duty rate for such fuels, subject to specified conditions and compliance with Bureau of Indian Standards (BIS) specifications.

 

The decision comes after India achieved its target of 20 per cent ethanol blending in petrol and is now exploring the adoption of higher blends.

 

 

The government has been encouraging ethanol use as part of its strategy to reduce dependence on crude oil imports, improve energy security and lower carbon emissions.

 

The policy is also expected to benefit sugar mills and grain-based distilleries, which have emerged as key suppliers of ethanol under the blending programme.

 

India has significantly increased ethanol blending in petrol over the past few years through a combination of incentives, procurement programmes and regulatory measures.

 

The government has identified biofuels as an important component of its energy transition strategy.