New Delhi: In a series of notifications, the central government has announced a massive tax waiver to boost the adoption of biofuels in India. According to a notification issued by the Ministry of Finance, the government has removed the basic central excise duty, reducing it to nil, for certain higher-grade variants of ethanol-blended petrol.
This includes E22, E25, E27, and E30 variants that the government aims to introduce soon as it is rolling out E20 nationwide. This remains just an announcement for now, as the government hasn’t launched these variants yet.
E20 continues to be available at petrol pumps with the prevailing excise duty rates.
Moving beyond E20
This move comes at a time when the government has achieved its target of 20% ethanol blending in petrol ahead of schedule and is now looking to enhance it with the E22, E25, E27 and E30 variants. Though there have been complaints about greater fuel consumption and reduced mileage due to ethanol-blended petrol, the government has dismissed these and is set to go ahead with its plans as it looks to reduce the humongous foreign exchange it spends on fuel imports.
Recently, the government launched E85 fuel, which is 85% ethanol and 15% petrol, though no vehicles currently sold can run on this fuel.
With crude oil prices moving past $100 due to the Middle East conflict, the government is in a hurry to mitigate the challenge by lowering its fuel bills with ethanol-blended fuel to save crucial foreign exchange.
