India waives excise duty on 22‑30% ethanol‑blended petrol

The Indian government has announced a complete exemption of excise duty on petrol containing 22% to 30% ethanol (E20‑E30). The move is intended to boost the country's ethanol‑blending programme, reduce dependence on imported crude oil, lower carbon emissions and support the domestic sugar industry, which supplies most of the feedstock for ethanol. Following the announcement, shares of several sugar companies – including Dhampur Sugar Mills, Dwarikesh Sugar Industries and Balarampur Chini Mills – rose 2‑3% on the stock market.

The policy also aims to make higher‑ethanol fuels more price‑competitive, which officials say could eventually bring down retail fuel costs. However, challenges remain: the vast majority of Indian vehicles are not compatible with blends above E20, only a few flex‑fuel models such as the Maruti Wagon R can run on E85. Additionally, concerns have been raised about the need for adequate storage and distribution infrastructure, especially for the newly introduced E‑85 fuel that is being offered at a handful of stations in Nagpur.

The exemption reflects the government's broader push for energy security and rural income generation, while highlighting the technical and logistical hurdles that must be addressed for widespread adoption of high‑ethanol fuels.