The government has waived excise duty on variants of ethanol-blended petrol, according to a notification issued by the finance ministry. The duty waiver applies to E22, E25, E27, and E30 variants of petrol, which contain 22 per cent, 25 per cent, 27 per cent, and 30 per cent ethanol respectively.
Encouraging Cleaner Fuel Adoption
In the notification, the ministry stated that excise duty will be 'nil' on these ethanol-blended petrol variants. The move is aimed at encouraging consumers to shift towards ethanol-blended petrol, which is considered a cleaner and more environmentally friendly fuel option. By reducing the cost of these blends, the government hopes to boost their adoption across the country.
The excise duty waiver comes against the backdrop of petrol and diesel prices rising by nearly Rs 7.50 a litre in the second half of May. This increase has put pressure on household budgets and the broader economy, prompting the government to take steps to mitigate the impact.
Previous Duty Cuts
Earlier in March, the government had reduced excise duty on petrol and diesel by Rs 10 per litre, foregoing over Rs 1 lakh crore of annual revenue. That decision was aimed at shielding domestic consumers from the surge in global crude oil prices amid the ongoing West Asia conflict. The latest waiver on ethanol-blended petrol is a continuation of efforts to provide relief to consumers while promoting sustainable energy sources.
The finance ministry's notification is expected to make ethanol-blended petrol more affordable, potentially increasing its demand and helping India achieve its ethanol blending targets. The government has set a target of 20 per cent ethanol blending in petrol by 2025, and measures like this are crucial to reaching that goal.
