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Petrol blended with ethanol concentrations between 22 and 30 per cent will no longer attract excise duty, the central government has announced, laying the fiscal groundwork for a post-E20 fuel landscape in India.
The notification, first reported by Reuters, extends tax relief to blends designated E22, E25, E27, and E30 variants that until now had no formal fiscal support. Coming on the heels of the Bureau of Indian Standards notifying condition specifications to these same blends under IS 19850:2026, the excise waiver completes a two-part policy push: one that defines the technical standards, and another that makes commercial rollout financially viable.
The BIS standards, which took effect on might 15, 2026, lay out standards covering ethanol content thresholds, octane ratings, sulphur limits, and testing protocols. With those benchmarks now in place and excise duty removed, the infrastructure to mainstream adoption of higher ethanol blends is efficiently in position.
India's ethanol blending ambitions have consistently outpaced their own timelines. The National Policy on Biofuels, originally framed in 2018 and revised in 2022, pulled forward the E20 target by five years, from 2030 to the 2025-26 Ethanol Supply Year.
general sector oil marketing companies crossed the 10 per cent blending limit in June 2022, five months before the deadline. The trajectory since then has been steadily upward: blending reached 12.06 per cent in ESY 2022-23, climbed to 14.60 per cent the following year, and stood at 17.98 per cent through February 2025 in ESY 2024-25. With E20 now efficiently within striking distance, attention in policy circles has already shifted to what follows.
The excise exemption to E22 through E30 blends is the clearest signal yet of where that attention is focused.
Reducing application on imported crude oil sits at the heart of India's biofuel push. The country imports the bulk of its petroleum needs, making the import bill one of its most significant recurring expenditures.
Union Road Transport and Highways Minister Nitin Gadkari has made the argument plainly: nearly 87 per cent of India's fossil fuel is sourced from abroad, and the government's response is a framework built around fuels that are domestically produced, cost-competitive, and detergent-burning. Every litre of ethanol displacing imported crude, in this logic, keeps money within the economy while generating demand to agricultural feedstock, with sugarcane farmers, rural workers, and tribal communities among those expected to benefit.
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