India scraps excise duty on petrol with 22% to 30% ethanol blend
India scraps excise duty on petrol with 22% to 30% ethanol blend
M.U.H
11/06/202626
India has removed excise duty on petrol blended with higher levels of ethanol, giving a tax push to the country's efforts to increase the use of alternative fuels and reduce dependence on imported crude oil.
According to a government notification issued on Wednesday, petrol containing 22% to 30% ethanol will be exempt from excise duty.
The decision comes as India, the world's third-largest importer and consumer of oil, continues to increase the use of ethanol in its fuel mix as part of its broader energy security strategy.
Excise duty is a tax imposed by the government on certain goods, including fuels. By exempting petrol with higher ethanol content from this duty, the government is making such fuel blends more economically attractive for producers and suppliers.
The notification applies to petrol containing ethanol levels between 22% and 30%.
The government has not announced any immediate changes for regular petrol sold at retail outlets, but the move is expected to encourage the development and supply of higher ethanol-blended fuels.
WHY INDIA IS PUSHING ETHANOL-BLENDED PETROL
India relies heavily on imported crude oil to meet its energy requirements. Increasing the use of ethanol, which is produced domestically from agricultural feedstocks such as sugarcane and grains, helps reduce dependence on imported fossil fuels and lowers the country's exposure to global oil price swings.
The ethanol blending programme has also created an additional market for farmers and supported the government's broader goal of improving energy security.
India has rapidly increased ethanol blending in petrol over the past decade as it seeks to cut its oil import bill and promote cleaner fuels.
The latest tax relief signals that India wants to encourage the use of petrol with a greater share of ethanol. It also reflects the government's continued focus on alternative fuels at a time when the country is trying to balance rising energy demand with the need to reduce reliance on imported oil.
For consumers, the immediate impact may be limited. However, the move marks another step in India's long-term plan to increase the role of domestically produced ethanol in its transport fuel mix.
