The Indian government has announced a central excise duty exemption on petrol blended with ethanol concentrations of 22, 25, 27 and 30 percent, also known as E22, E25, E27 and E30, respectively. The Bureau of Indian Standards (BIS) had already set the fuel standards for these blends on May 19, although they are not yet available at regular fuel stations. This exemption is expected to make fuels with higher ethanol blends more commercially viable for oil marketing companies and retailers once the supply chain is established. They could be priced relatively lower than E20 petrol (Rs 102.12 per litre in Delhi on June 11).
- Excise duty exemption may result in relatively lower prices than E20
- 20 percent ethanol (E20) is the current blending baseline for petrol
“Following the achievement of 20 percent ethanol blending (E20) under the Ethanol Blended Petrol programme, the new standard aims to promote cleaner transportation, enhance energy security, reduce crude oil imports and support the agriculture sector,” BIS stated.
500 E85 dispensing stations targeted by 2026-end
This comes a few days after the government introduced E85 fuel on June 5, which, as the name suggests, is a blend of 85 percent ethanol and petrol. At Rs 82.12 per litre, E85 is priced Rs 20 lower than E20. In the short term, the government plans to set up around 50-100 E85 fuel stations across the Delhi-NCR and the Mumbai-Pune-Nagpur corridor, ramping it up to 500 by the end of this year.
E85-compliant vehicles require additional engineering
It should be noted that E20 vehicles are not supposed to run on extremely high ethanol concentrations such as E85. Vehicles compliant with E85 fuel come with additional engineering and validation work around engine calibration, fuel-system durability, corrosion resistance and material compatibility.
On June 4, Maruti Suzuki showcased the production-spec Wagon R Flex Fuel, having previously showcased prototypes of the hatchback on two separate occasions. For now, the carmaker has made this flex-fuel hatchback available only for commercial use, but its price has not been announced.
Separately, the government is also considering blending isobutanol (a biofuel made from ethanol) with diesel. The shift to isobutanol follows unsuccessful ethanol-diesel blending trials.
Dhruv Dhaka
Glenn Noronha
