India Waives Excise Duty on Ethanol-Blended Petrol to Expand Alternative Fuel Use

The Indian government issued a gazette notification on June 10, 2026, granting nil central excise duty on petrol blended with 22%, 25%, 27%, and 30% ethanol by volume, covering blends known as E22, E25, E27, and E30. The exemption is designed to prevent double taxation, since petrol already bears excise duty and ethanol bears GST at their respective production stages; blending the two could otherwise trigger a fresh excise levy on the combined product. The government clarified that the exemption does not signal an imminent commercial rollout of these higher blends, stating that wider adoption will only follow extensive testing and consultation. The move builds on the Bureau of Indian Standards' May 2026 notification of technical standards for these blends under IS 19850:2026, which established parameters including ethanol content, octane ratings, sulphur limits, and safety requirements. It also coincides with the June 5 launch of E85 fuel — an 85% ethanol, 15% petrol blend — at 48 public-sector fuel stations, priced approximately ₹20 per litre below E20 petrol to offset ethanol's lower energy content. India, the world's third-largest oil importer, has rapidly expanded its ethanol blending programme, reaching 17.98% blending in ESY 2024-25 and approaching its E20 target ahead of schedule. Industry bodies including the Grain Ethanol Manufacturers Association and the All-India Distillers Association welcomed the excise exemption as a signal of policy stability and a catalyst for investment across the ethanol supply chain.