The government has announced an exemption from excise duty for petrol blended with higher levels of ethanol. This exemption applies to fuel variants containing 22%, 25%, 27%, and 30% ethanol, as per a notification issued by the Ministry of Finance. The excise duty has been set at nil for ethanol-blended motor spirit that meets Bureau of Indian Standards specifications, covering blends with ethanol content ranging from 22% to 30% by volume.
The exemption has been granted under Section 5A of the Central Excise Act, 1944. The revised structure includes E22, E25, E27, and E30 petrol, defined as mixtures of motor spirit (petrol) and ethanol in specified proportions. This move aligns with India’s efforts to expand ethanol blending in petrol as part of its biofuel policy to reduce crude oil imports and promote domestic renewable fuel usage.
India has been steadily increasing ethanol blending levels in petrol in recent years, supported by policy changes under the National Policy on Biofuels. The government has also launched E85 fuel for compatible flex-fuel vehicles. Union Petroleum and Natural Gas Minister Hardeep Singh Puri highlighted India’s progress in ethanol blending, noting that the share of ethanol in petrol has increased significantly, surpassing the 20% blending target ahead of schedule.
