The Indian government announced that petrol containing 22 to 30 percent ethanol will no longer attract excise duty.
This means E22, E25, E27, and E30 fuel categories now enjoy zero excise duty, offering direct savings to consumers.
As a result, demand for ethanol-blended affordable petrol is expected to rise, benefiting both citizens and farmers.
Ethanol production primarily uses sugarcane, maize, and damaged grains, which increases agricultural income alongside cheaper fuel.
Global Oil Price Surge and Energy Strategy
Crude oil prices have surged to $114 per barrel, raising India’s import bill significantly.
Consequently, the government emphasized alternative fuels to reduce import dependence and strengthen the rupee’s position.
Understanding Excise Duty
Excise duty is an indirect tax applied to goods manufactured domestically, particularly on alcohol, tobacco, and petroleum products.
Removing it on ethanol-blended petrol reduces costs while promoting environmentally friendly and locally produced fuel alternatives.
Rules for Zero Excise Duty
The new government order requires petrol to meet Bureau of Indian Standards (BIS) specifications to qualify for zero excise duty.
This ensures safety and quality compliance for E22, E25, E27, and E30 fuel types.
Comparing Fuel Options: E85 vs E20
India previously promoted E20 petrol, containing 20% ethanol.
Recently, India launched E85 petrol, containing 85% ethanol and 15% petrol, to further reduce dependency on crude oil.
E85 fuel is approximately ₹20 cheaper per liter than E20, offering significant consumer savings.
