The Central Government has exempted petrol blended with 22% to 30% ethanol from excise duty, according to a Finance Ministry notification. The move covers E22, E25, E27 and E30 fuel variants and is expected to accelerate India’s ethanol blending programme, reduce crude oil imports and support the country’s clean energy and biofuel goals.
✅ Government exempts E22, E25, E27 and E30 petrol from excise duty.
✅ Exemption applies to ethanol blends containing 22% to 30% ethanol.
✅ Notification issued under Section 5A of the Central Excise Act, 1944.
✅ Move supports India’s biofuel and energy security objectives.
✅ Ethanol blending in petrol has risen significantly since 2014.
✅ India achieved its 20% ethanol blending target ahead of schedule.
✅ E85 fuel recently launched for compatible flex-fuel vehicles.
New Delhi, June 11: In a major boost to India’s biofuel and energy transition strategy, the Central Government has exempted petrol blended with higher levels of ethanol from excise duty, according to a notification issued by the Ministry of Finance on Thursday.
The exemption applies to ethanol-blended motor spirit containing 22 per cent, 25 per cent, 27 per cent and 30 per cent ethanol by volume, commonly referred to as E22, E25, E27 and E30 fuel variants.
As per the notification, excise duty has been fixed at nil on these fuel blends provided they conform to the specifications prescribed by the Bureau of Indian Standards (BIS).
The exemption has been granted under Section 5A of the Central Excise Act, 1944, enabling higher ethanol-blended petrol to become more economically attractive as India accelerates its transition toward cleaner and more sustainable fuel alternatives.
The revised fuel structure covers blends made by mixing duty-paid petrol with ethanol, while applicable central, state, Union Territory or integrated taxes on ethanol continue to apply.
The latest policy measure aligns with India’s broader strategy to reduce dependence on imported crude oil, enhance energy security and promote the use of domestically produced renewable fuels.
Over the past decade, the government has aggressively expanded ethanol blending in petrol under the National Policy on Biofuels, supported by ambitious targets and incentives aimed at increasing domestic ethanol production.
The initiative has also created new opportunities for India’s agricultural sector by generating additional demand for sugarcane, maize and other feedstocks used in ethanol production.
In a related development, the government recently introduced E85 fuel, a blend containing up to 85 per cent ethanol, for compatible flex-fuel vehicles as part of efforts to promote alternative fuels and cleaner mobility solutions.
Union Petroleum and Natural Gas Minister Hardeep Singh Puri has repeatedly highlighted India’s rapid progress in ethanol blending.
According to the minister, ethanol blending in petrol increased from 1.5 per cent in 2014 to 10 per cent by November 2022, while the government’s target of achieving 20 per cent ethanol blending by 2030 was accomplished ahead of schedule in 2024.
“Our target was to achieve 20 per cent blending by 2030, but we completed it in 2024 itself,” Puri recently stated while discussing India’s growing biofuel ecosystem.
Industry experts believe the excise duty exemption for higher ethanol blends could encourage wider adoption of ethanol-based fuels, attract investment in biofuel infrastructure and further strengthen India’s long-term energy sustainability goals.
The government’s decision to exempt high-ethanol petrol blends from excise duty marks another significant step in India’s clean energy transition. By promoting E22, E25, E27 and E30 fuels alongside expanding ethanol production and flex-fuel adoption, India is accelerating its efforts to reduce crude oil dependence, strengthen energy security and build a more sustainable transportation ecosystem.
FAQ Section
Q1. Which ethanol-blended fuels have been exempted from excise duty?
The exemption applies to E22, E25, E27 and E30 petrol blends containing 22% to 30% ethanol.
Q2. Under which law was the exemption granted?
The exemption has been granted under Section 5A of the Central Excise Act, 1944.
Q3. What is the purpose of the excise duty exemption?
The move aims to promote ethanol blending, reduce crude oil imports, strengthen energy security and support India’s biofuel policy objectives.
Q4. What is E85 fuel?
E85 is a fuel blend containing up to 85% ethanol and is designed for compatible flex-fuel vehicles.
Q5. Has India achieved its ethanol blending target?
Yes. India achieved its 20% ethanol blending target in 2024, ahead of the original 2030 deadline.
