The government has given a good news: Excise duty on ethanol-blended petrol has been abolished. This means that now there will be no excise duty on petrol containing 22% to 30% ethanol. This news is no less than a gift for the common man. As demand for cheap ethanol-blended petrol increases, both farmers and the general public will benefit, as ethanol is primarily made from sugarcane, corn and spoiled grains. It is worth noting that crude oil prices have increased to $114 per barrel, due to which the import bill is directly increasing. As a result, the government is emphasizing on alternative fuels to reduce imports and strengthen the rupee.
What is excise duty?
Excise duty is an indirect tax that is imposed on goods manufactured or produced within the country. It is commonly imposed on products such as alcohol, tobacco and petroleum.
Rules of zero excise duty-
Under a new order of the government, excise duty on 22%, 25%, 27% and 30% ethanol-blended petrol has been abolished. The only condition with this decision is that the fuel should be produced as per the rules and standards set by the Bureau of Indian Standards (BIS).
Which fuel is cheaper: E85 or E20?
While the country was already promoting E20 (20% ethanol-blended petrol), India has recently launched E85 fuel in the market to ensure national energy security amid global instability. E85 fuel contains 85% ethanol and 15% petrol. The special thing is that E85 fuel is ₹ 20 per liter cheaper than E20.