India Expands Tax Exemption to Ethanol-Blended Gasoline Amid Energy Shortage
To address energy supply shortages and reduce dependence on imported crude oil, the Indian government has expanded its excise duty exemption to gasoline containing 22% to 30% ethanol, promoting cleaner energy use.
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- 📰 Published: June 11, 2026 at 14:25
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(Central News Agency correspondent Li Jinwei, New Delhi, 11th) As the Middle East conflict has not fully ceased and global energy supply cannot be fully restored, the Indian government, in order to reduce its dependence on imported crude oil and encourage the public to use ethanol-blended gasoline, has now expanded the scope of excise duty exemption to cover gasoline containing 22% to 30% ethanol.
After the conflict between the United States, Israel, and Iran in February, peace talks are currently underway. The blockade of the Strait of Hormuz, a vital waterway for 20% of the world's oil and gas transportation, has not been completely lifted due to the Middle East war.
India relies on imports for over 80% of its oil and natural gas and has been severely impacted by the blockade of the Strait of Hormuz. After policies including subsidies could no longer compensate for the huge losses of related companies, domestic fuel prices have risen four times in a row since mid-May.
The Hindustan Times reported today that the Indian government has expanded the scope of excise duty exemption to gasoline containing 22%, 25%, 27%, and 30% ethanol.
At the end of March, the Indian government had already reduced excise duty on domestic petrol and diesel by 10 rupees per liter to protect consumers from rising international oil prices. Now, a new notification states that gasoline containing 22%, 25%, 27%, and 30% ethanol will be exempt from excise duty, provided it meets the IS19850 standard of the Bureau of Indian Standards, and on the condition that the ethanol added to the gasoline has already paid excise duty and other related taxes.
India is the world's third-largest oil importer and consumer. For its energy security strategy, to reduce expenditure on imported oil, and to promote clean energy, the Indian government has been encouraging an increase in the ethanol content in gasoline for the past decade.
India Today reported today that India's energy demand is highly dependent on imported crude oil. Using ethanol-blended gasoline helps reduce this dependence and can lower India's vulnerability to global oil price fluctuations.
Since producing ethanol requires raw materials like sugarcane, which are already grown in India, promoting the use of ethanol-blended gasoline not only helps the government achieve its energy security goals but also creates additional income for Indian farmers. (Editor: Wei Shu) 1150611
After the conflict between the United States, Israel, and Iran in February, peace talks are currently underway. The blockade of the Strait of Hormuz, a vital waterway for 20% of the world's oil and gas transportation, has not been completely lifted due to the Middle East war.
India relies on imports for over 80% of its oil and natural gas and has been severely impacted by the blockade of the Strait of Hormuz. After policies including subsidies could no longer compensate for the huge losses of related companies, domestic fuel prices have risen four times in a row since mid-May.
The Hindustan Times reported today that the Indian government has expanded the scope of excise duty exemption to gasoline containing 22%, 25%, 27%, and 30% ethanol.
At the end of March, the Indian government had already reduced excise duty on domestic petrol and diesel by 10 rupees per liter to protect consumers from rising international oil prices. Now, a new notification states that gasoline containing 22%, 25%, 27%, and 30% ethanol will be exempt from excise duty, provided it meets the IS19850 standard of the Bureau of Indian Standards, and on the condition that the ethanol added to the gasoline has already paid excise duty and other related taxes.
India is the world's third-largest oil importer and consumer. For its energy security strategy, to reduce expenditure on imported oil, and to promote clean energy, the Indian government has been encouraging an increase in the ethanol content in gasoline for the past decade.
India Today reported today that India's energy demand is highly dependent on imported crude oil. Using ethanol-blended gasoline helps reduce this dependence and can lower India's vulnerability to global oil price fluctuations.
Since producing ethanol requires raw materials like sugarcane, which are already grown in India, promoting the use of ethanol-blended gasoline not only helps the government achieve its energy security goals but also creates additional income for Indian farmers. (Editor: Wei Shu) 1150611
FAQ
Why is the Indian government promoting ethanol gasoline?
To reduce dependence on imported crude oil and strengthen energy security.
What ethanol blend rates are covered by this exemption?
Gasoline containing 22%, 25%, 27%, and 30% ethanol.
Who benefits from this policy?
Consumers, ethanol producers, and sugarcane farmers.