The move is aimed at accelerating cleaner fuel adoption and reducing dependence on imported crude oil
In a significant move to strengthen India’s clean energy transition, the Centre has exempted higher ethanol-blended petrol from central excise duty, extending tax incentives beyond the existing E20 fuel programme.
According to a notification issued by the Ministry of Finance’s Department of Revenue, excise duty has been reduced to nil on petrol blended with ethanol at 22 per cent, 25 per cent, 27 per cent and 30 per cent levels. The amendment modifies the principal excise notification issued in June 2017.
The decision is expected to provide a major boost to the production and adoption of higher ethanol-blended fuels across the country.
The government notification specifies that the fuel must conform to Bureau of Indian Standards (BIS) specifications and consist of the prescribed proportion of petrol and ethanol on which applicable taxes have already been paid.
Excise duty is an indirect tax imposed on the manufacture and sale of specific goods. Businesses typically pass this cost on to consumers through product pricing. By eliminating excise duty on higher ethanol blends, the government aims to make these fuels more commercially viable and attractive for manufacturers, suppliers and fuel retailers.
The move forms part of India’s broader strategy to reduce dependence on imported crude oil, enhance energy security and promote cleaner transportation fuels. Higher ethanol blending also supports the country’s environmental goals by helping reduce carbon emissions from conventional fossil fuels.
Industry experts believe the tax exemption could accelerate investments in ethanol production infrastructure and encourage oil marketing companies to expand the availability of higher ethanol-blended fuels in the future.
The latest policy decision further strengthens India’s ethanol blending programme, which has been a key component of the government’s efforts to promote renewable energy and build a more sustainable fuel ecosystem.
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