India Waives Excise Duty on High-Ethanol Petrol Blends

The Government of India has waived the central excise duty on petrol blends containing 22%, 25%, 27%, and 30% ethanol (E22, E25, E27, and E30). This fiscal measure, announced by the Ministry of Finance, removes the Basic Excise Duty, Special Additional Excise Duty, Road and Infrastructure Cess, and Agriculture Infrastructure and Development Cess for fuels meeting Bureau of Indian Standards specifications. The move aims to lower consumer costs amid rising crude oil prices, which have exceeded $100 per barrel due to conflict in West Asia.

To support this transition, the Ministry of Petroleum and Natural Gas plans to install 5,000 E100 (100% ethanol) dispensing stations by 2027. An initial pilot network of 50 to 100 stations will launch in the Delhi-NCR region and the Mumbai-Pune-Nagpur corridor, expanding to 500 outlets by the end of 2026. Additionally, Union Minister Hardeep Singh Puri announced the introduction of E85 fuel, priced ₹20 lower than E20.

The policy triggered a rally in sugar stocks, with companies such as Dwarikesh Sugar, Dhampur Sugar, and Balrampur Chini seeing gains of 2% to 4%. In the automotive sector, Maruti Suzuki launched the Wagon R Flex Fuel, while Hero MotoCorp introduced E85-ready motorcycles. These efforts seek to reduce reliance on imported crude and support the agricultural sector, despite some consumer reports of engine wear in older vehicles.