The Ethanol Blended Petrol (EBP) programme has resulted in payments to farmers to the tune of over ₹1.43 lakh crore from Ethanol Supply Year (ESY) 2014-15 up to December 2025

​Petrol with ethanol blending between 22 and 30 per cent will be exempted from Central Excise Duty. The Finance Ministry has issued multiple notifications to that effect.

As on date, petrol with blending up to 10 per cent is exempted from Central Excise Duty. For unbranded petrol, Central Excise Duty is ₹11.90 per litre, while for branded it is ₹13.10 per litre. The price of petrol (including ethanol blended petrol) has been market determined with effect from June 26, 2010. Since then, oil marketing companies (OMCs) take appropriate decisions on pricing of petrol based on, inter alia, international product prices and domestic market conditions.

According to a notification, there will be nil duty for 22 per cent ethanol blended petrol consisting, by volume, of 78 per cent motor spirit (commonly known as petrol), on which the appropriate duties of excise have been paid, and of 22 per cent ethanol on which the appropriate Central tax, State tax, Union territory tax or Integrated tax have been paid. It should conform to the Bureau of Indian Standards specification.

Similar provision will apply for 25 per cent ethanol blended petrol that is a blend, consisting, by volume, of 75 per cent motor spirit, on which the appropriate duties of excise have been paid, and of 25 per cent ethanol on which the appropriate Central tax, State tax, Union territory tax or Integrated tax have been paid. This should conform to the Bureau of Indian Standards specification. The same mechanism will be applicable for 27 per cent and 30 per cent ethanol blended petrol.

According to a written answer given in the Lok Sabha by Suresh Gopi, Minister of State in the Oil Ministry, the target of 20 per cent ethanol blending has been achieved in December 2025 due to the concerted efforts of the government that have led to increased ethanol blending with petrol from 38 crore litres in Ethanol Supply Year (ESY) 2013-14 to over 1,000 crore litres in ESY 2024-25. Public Sector Oil Marketing Companies (OMCs) achieved the target of 10 per cent ethanol blending in petrol in June 2022, i.e. five months ahead of the target during ESY 2021-22.

Ethanol blending levels thereafter increased to 12.06 per cent in ESY 2022-23, 14.60 per cent in ESY 2023-24, and 19.24 per cent in ESY 2024-25. During ESY 2025-26, as on December 31, 2025, more than 179 crore litres of ethanol have been blended, achieving an average ethanol blending of 20 per cent in petrol.

The Ethanol Blended Petrol (EBP) programme has resulted in payments to farmers to the tune of over ₹1.43 lakh crore from Ethanol Supply Year (ESY) 2014-15 up to December 2025, besides savings of more than ₹1.63 lakh crore of foreign exchange, net CO2 reduction of approximately 832 lakh metric tonnes and substitution of more than 277 lakh metric tonnes of crude oil, the Minister said.

Further, procurement prices of ethanol have been increasing over the years. For the Ethanol Supply Year 2024-25, the average procurement cost of ethanol stands at ₹71.55 per litre (inclusive of transportation and GST), which is higher than petrol produced in refineries.

Published on June 11, 2026