The Modi administration on Thursday (June 11) notified the exemption of higher ethanol blended petrol from the central excise duty entirely.
The notification, as issued by the Department of Revenue (Ministry of Finance), fully waived the central excise tax on petrol blends comprising more than 20% ethanol, namely, E22, E25, E27 and E30.
E22 refers to petrol blended with 22% ethanol, E25 with 25% ethanol blend and so forth.
Ramifications Of The Waived Tax On Higher Ethanol Blended Petrol
The “nil” tax rate on E22-E30 variants would in turn expedite biofuel blending and encourage faster adoption of ethanol-blended fuel in the country, boosting government’s Ethanol Blended Petrol (EBP) programme.
It will also lower India’s crude oil imports since the domestically produced E20 variant alone substituted about 24.5 million tonnes of imported crude oil, bolstering the country’s energy security. Thereby, the tax exemption yielding further production of EBP, saves foreign exchange as well, where, according to the Ministry of Petroleum and Natural Gas (MoPNG), ₹30,000 crore-₹43,000 crore were saved in forex after the roll-out of E20 variant.
Additionally, the higher EBP will support local distilleries and farmers, transforming “Annadatas to Urjadatas”. Furthermore, EBP compatible flex-fuel vehicles will reduce carbon emissions, contributing to India’s climate change goals.
If the Oil Marketing Companies (OMCs) pass on the benefits to consumers, the price of E30 may decline by ₹11.90 per litre.
BIS Standards For E30
The Bureau of Indian Standards (BIS) had issued fresh standards for E22-E30 variants, notified on May 15, 2026, to ensure quality roll-out of the 22% to 30% EBP nationwide.
The BIS held that,
“Following the achievement of 20% ethanol blending under the EBP Programme, the new standard aims to promote cleaner transportation, enhance energy security, reduce crude oil imports, and support the agriculture sector.”
E85 Variant Introduced
The policy development comes days after the official launch of E85, that is, a blend of 80-85% ethanol with 14-19% petrol. It is ₹20 per liter lesser in price vis-a-vis conventional E20 petrol and can be used only in specific flex-fuel vehicles compliant with E85. Thus, as the Union Minister of Petroleum Hardeep Singh Puri said, “India’s ethanol journey is unstoppable.”