India Waives Excise Duty on Blended Petrol to Boost Ethanol Use

India, world's third-largest oil importer and consumer, has waived excise duty on blended petrol. The exemption covers E22, E25, E27 and E30 fuel blends, which contain varying proportions of motor spirit and ethanol. As per the finance ministry's notification, these blends consist of 78%, 75%, 73% and 70% motor spirit mixed with 22%, 25%, 27% and 30% ethanol by volume, respectively. The move is part of the government's broader push to expand the use of ethanol, with plans to open 50-100 ethanol fuel stations in Delhi-NCR, Pune, Mumbai, Nagpur and scale up the network to 500 by the end of 2026. The move comes as petrol and diesel prices in the country have jumped over Rs 7.5 per litre since the Middle East crisis began, after remaining largely unchanged for almost 4 years. Minister Puri had earlier said that state-run oil marketing companies are preparing to offer E85 fuel at a discount of Rs 20 per litre compared with E20 petrol. The discount is aimed at offsetting the lower energy content of the fuel. E85 is a blend comprising 85% ethanol and 15% petrol. Since ethanol has around one-third lower energy content than petrol, the price reduction has been introduced to compensate users for the difference. Meanwhile, E20 petrol, which contains 20% ethanol and 80% petrol, will continue to be available at all fuel stations, as most vehicles on Indian roads are compatible with ethanol blends of up to 20%. Meanwhile, energy supplies across the globe are under stress due to the ongoing Middle East war. The conflict, which began back on February 28 after US and Israel launched joint strikes on Iran, has continued to intensify even as peace efforts continue from both sides. With global crude oil prices climbing from around $70 per barrel to above $100, oil marketing companies continue to face significant under-recoveries on fuel sales. Despite a cumulative increase of over Rs 7.5 per litre in retail prices, the firms are still losing around Rs 12 per litre on petrol and Rs 21 per litre on diesel.