The Indian government abolished all central excise duties on petrol blended with higher levels of ethanol on Wednesday, June 10 [1], [3].
This policy shift aims to lower the cost of sustainable fuels for consumers and improve the financial viability of high-blend ethanol for oil marketing companies. By reducing the tax burden, the government intends to accelerate the transition toward cleaner energy and reduce reliance on imported crude oil.
The waiver specifically applies to petrol blended with ethanol in the range of 22% to 30% [1]. This measure is a strategic step toward achieving the national target of 30% ethanol blending in petrol [4].
According to reports, the duty waiver could result in a discount of ₹20 per litre for E85 fuel compared with regular petrol [2]. The move is designed to make higher blends more competitive at the pump, encouraging vehicle owners to adopt fuels that produce fewer emissions.
While some reports indicate the government has issued a draft notification to incorporate higher blends like E85 and E100, the central excise duties on the 22% to 30% range have been waived [3], [5]. This adjustment addresses the economic hurdles faced by distributors in scaling up the production of high-ethanol blends.
The initiative aligns with broader environmental goals to promote sustainable fuels. By removing these taxes, the government is leveraging fiscal policy to bridge the price gap between traditional fossil fuels and greener alternatives [1], [4].
“The Indian government abolished all central excise duties on petrol blended with higher levels of ethanol.”
This move signals India's commitment to energy security and decarbonization. By removing excise duties on high-blend ethanol, the government is attempting to create a market-driven incentive for both oil companies and consumers to move away from pure petrol. If successful, this could significantly lower the country's carbon footprint and reduce the foreign exchange outflow spent on oil imports.
