Higher Ethanol Blends Exempted from Excise Duty

New Delhi: The central government has announced that excise duty exemption, which was previously applicable to petrol blended with 20% ethanol (E20), will now extend to higher blends of 22%, 25%, 27%, and 30% ethanol (E30).

The notification clarified that blending ethanol with petrol at fuel depots is considered a manufacturing activity, which normally attracts excise duty. To avoid this, the exemption has been introduced as a regulatory measure and to encourage wider public use of ethanol-blended petrol.

The decision also aims to reduce crude oil imports and increase the use of biofuels. With crude oil prices rising due to the West Asian conflict, petrol and diesel prices have surged by up to ₹7.50 per litre. To protect consumers, the government had already reduced excise duty on petrol and diesel by ₹10 per litre in March.

This latest exemption is expected to strengthen India’s biofuel adoption strategy, promote cleaner energy, and support farmers engaged in ethanol production.