The government has announced a major relief for consumers by removing excise duty on certain types of ethanol-blended petrol.
This move is expected to make cleaner fuel more affordable and encourage its wider use across the country.
Petrol containing 22% to 30% ethanol will now be exempt from excise duty.
As a result, ethanol-based fuel could become a more attractive and cost-effective option for vehicle owners.
The decision is not only good news for consumers but also for farmers.
Since ethanol is mainly produced from sugarcane, corn, and damaged grains, higher demand for ethanol could create more opportunities for the agricultural sector.
Why Is the Government Promoting Ethanol Fuel?
One of the biggest reasons behind this decision is the rising cost of crude oil. Global crude oil prices have climbed sharply and are now around $114 per barrel.
Higher crude oil prices increase India’s import bill and put pressure on the economy.
To reduce dependence on imported fuel, the government is focusing on alternative energy sources such as ethanol-blended petrol.
This strategy can help lower fuel imports, support domestic production, and strengthen the country’s economy over time.
What Is Excise Duty?
Excise duty is an indirect tax imposed on goods that are manufactured within a country.
It is commonly charged on products such as petroleum, alcohol, and tobacco.
By removing this tax on specific ethanol-blended fuels, the government aims to encourage their adoption and make them more affordable.
New Rules for Ethanol-Blended Petrol
Under the latest government notification, excise duty has been removed from petrol blended with 22%, 25%, 27%, and 30% ethanol.
However, there is one important condition.
These fuels must be produced according to the quality standards and regulations set by the Bureau of Indian Standards (BIS).
E85 vs E20: Which Fuel Is Cheaper?
India has been promoting E20 fuel, which contains 20% ethanol and 80% petrol.
However, the country has recently introduced E85 fuel as part of its efforts to reduce fuel imports and increase energy security.
E85 consists of 85% ethanol and only 15% petrol.
The biggest advantage of E85 is its price.
Reports suggest that E85 fuel is around ₹20 per litre cheaper than E20, making it a more economical option for consumers while also reducing dependence on conventional petrol.
