India Waives Central Excise Duty on E22 to E30 Ethanol-Blended Petrol

The Indian government exempted petrol blended with 22% to 30% ethanol from central excise duty in a gazette notification issued late on Wednesday, June 10, 2026. The waiver extends a tax treatment that already applied to the E20 standard petrol sold across the country since April 1 this year. E22, E25, E27 and E30 blends now join E20 in attracting no central excise duty, even though the fuels are not yet sold at Indian fuel stations.

The notification is the third step in a three-part build that has been quietly assembling since May. The Bureau of Indian Standards (BIS) notified fuel standards for the four higher blends on May 19. The Ministry of Petroleum and Natural Gas launched E85, an 85% ethanol blend, on June 5. The excise framework cleared on June 10, leaving price parity and vehicle compatibility as the two remaining pieces of the puzzle for India’s push to lift its average ethanol blend to 27% by 2030.

The Quiet Three-Step Build

India’s ethanol roadmap for the second half of the decade has not arrived in a single announcement. It has assembled in three steps, each spaced days or weeks apart, each handled by a different arm of government. The build began on May 19, 2026, when the Bureau of Indian Standards published fuel standards for petrol blended with 22% to 30% ethanol under a new specification, IS 19850:2026, in the Gazette of India.

The standards cover four blends, E22, E25, E27 and E30, and lay down the technical parameters for their use: ethanol content, octane levels, sulphur content, vapour pressure, impurity limits, testing methods and safety norms. The Bureau said the new standard ‘aims to promote cleaner transportation, enhance energy security, reduce crude oil imports, and support the agriculture sector’. The Bureau’s notification did not, on its own, bring the new fuels to pumps; it only set the rules for them.

The second step came on June 5, 2026, when Petroleum and Natural Gas Minister Hardeep Singh Puri formally launched E85, a blend of 80% to 85% ethanol and 14% to 19% petrol, at a New Delhi retail outlet. The fuel is sold at ₹20 per litre less than regular E20 petrol, according to a Press Information Bureau statement, so that the benefit of domestically produced ethanol reaches the consumer. E85 is sold only at fuel stations run by state-owned oil marketing companies; in the first phase, it is available at the 48 retail outlets of public-sector OMCs in the National Capital Region and in Mumbai, Pune and Nagpur. The rollout is to be scaled up to 500 fuel stations by December 2026 and to about 5,000 by December 2027. The third step, the excise framework, came late on Wednesday June 10.

The three steps in order

• May 19, 2026: BIS notifies IS 19850:2026, fuel standards for E22, E25, E27 and E30 petrol blends, in the Gazette of India.
• June 5, 2026: Petroleum Minister Hardeep Singh Puri launches E85 fuel (80% to 85% ethanol, 14% to 19% petrol) at a New Delhi outlet; rollout begins at 48 public-sector OMC pumps.
• June 10, 2026: Central excise duty waived on petrol blended with 22% to 30% ethanol in a late-Wednesday gazette notification.

Why the Government Calls It ‘Nothing New’

A government statement issued after the excise notification worked to dampen expectations of an imminent price cut at the pump. The statement said there is ‘nothing new’ in the excise waiver, arguing that ‘blending of Ethanol with Petrol at the Depot level is theoretically a manufacturing activity which can be subject to Excise Duty’. The Ministry of Finance had exempted depot-level blending up to E20 from excise duty, the statement added, and that exemption has now been extended to E22, E25, E27 and E30 because the BIS standards for them now exist.

This is a preliminary prerequisite for eventually introducing higher blends but doesn’t convey anything about roll out of higher blends as of now as that will only be done after extensive testing and consultation.

The framing also keeps the door open on the rollout sequence. No commercial timeline was set for the launch of E22, E25, E27 or E30 in the gazette notification or in the government’s subsequent clarification. The Bureau of Indian Standards had itself said the notified standards are ‘not presently available commercially’, The Hindu reported.

E85 Lands at 48 Pumps

E85, the higher-ethanol fuel that anchors the next phase of India’s programme, is the most visible piece of the build. The Ministry of Petroleum and Natural Gas launched E85 at a New Delhi fuel station on June 5, 2026, with Petroleum Minister Hardeep Singh Puri presiding, per the petroleum ministry’s June 5 E85 rollout release. E85 is composed of 80% to 85% ethanol and 14% to 19% petrol and is designed for use in flex-fuel vehicles, which can run on any blend from E20 to E100. It is priced about ₹20 per litre lower than the standard E20 petrol sold across India since April 1, 2026. The first 48 outlets are run by public-sector oil marketing companies, with the National Capital Region, Mumbai, Pune and Nagpur covered in phase one.

The fuel is for flex-fuel vehicles only. Puri said at the launch that E85 dispensers will carry boards reading ‘E85-compliant cars only’ and that E20 vehicles ‘will run for a long time’. The arrival of E85 does not mean E20 or petrol vehicles will be discontinued, the minister said.

Auto manufacturers have begun adjusting to the new fuel. Maruti Suzuki and Hero MotoCorp have already rolled out flex-fuel compatible vehicles, Puri said in the petroleum ministry’s launch statement. Flex-fuel vehicles can run on petrol, ethanol, methanol or any blend of the two in the same fuel tank. The petroleum ministry’s June 5 statement said passenger vehicle producers in India are on board for the launch. At the same event, Puri cited Brazil as the long-term model, where over 80% of the light-vehicle fleet runs on flex-fuel technology, The Indian Express reported.

How India Went From 1.53% to 20% Blending

The excise notification extends a programme that has just cleared its own major milestone. India hit 20% ethanol blending in petrol in 2025, five years ahead of the original 2030 deadline, according to Puri’s June 5 statement. The ethanol blending rate in India has risen from 1.53% in 2014 to 20% in 2025. The country is the world’s third-largest oil importer and consumer, the same statement noted. The shift has been driven by a National Policy on Biofuels, the NITI Aayog roadmap for ethanol blending in India, and a series of amendments to the ethanol procurement policy.

The scale of the substitution is the figure the government is now leaning on. Puri said at the E85 launch that the E20 programme has saved over ₹1.84 lakh crore in foreign exchange and substituted nearly 302 lakh metric tonnes of crude oil imports. India’s crude imports were 226 million tonnes with an overall import dependency of 89 per cent, per Swarajya’s report on the excise waiver.

E20 is now the standard petrol across India. The mandatory sale of E20 petrol came into effect on April 1, 2026, completing the rollout that the ethanol blending programme had been working toward for over a decade. Puri said at the launch that since E20 became the standard fuel, no case of engine failure or vehicle breakdown attributable to ethanol blending had been reported. He added that flex-fuel vehicles remain competitive with electric vehicles because of their lower acquisition costs and their ability to use existing fuel infrastructure.

Most Indian petrol vehicles have been designed to run on E20. Going beyond E20 to E22, E25, E27 and E30 will need engineering changes in the wider fleet, since most vehicles in India are designed to tolerate 20 per cent ethanol-blended petrol. Several manufacturers have showcased flex-fuel compatible vehicles capable of running on multiple ethanol concentrations.

By the numbers

• 1.53% to 20%: India’s ethanol blending rate in 2014 vs 2025, per Petroleum Minister Hardeep Singh Puri’s June 5 statement.
• ₹1.84 lakh crore: foreign exchange saved by the E20 programme, per Puri.
• 302 lakh metric tonnes: crude oil imports substituted, per Puri.
• 48, then 500, then 5,000: E85 outlets planned for launch phase, December 2026, and December 2027.
• 61%: lifecycle greenhouse gas emissions cut for flex-fuel vehicles on E85 vs conventional petrol, per the Press Information Bureau statement.

Vehicle and Infrastructure Gaps

The excise waiver, the BIS standards and the E85 launch together set the legal and supply floor for higher blends. Whether the rest of the fleet follows is now the question. The Indian auto fleet is overwhelmingly calibrated to E20, with most cars and two-wheelers on the road engineered to tolerate 20% ethanol. Maruti Suzuki and Hero MotoCorp have rolled out flex-fuel vehicles, and other manufacturers have showcased prototypes, but the share of the on-road fleet that can use E27 or E30 is still small.

The fuel retail side has its own queue of changes. Industry executives told Business Standard that scaling up higher ethanol blends would require oil marketing companies to invest in dedicated storage tanks, separate dispensing infrastructure and supply-chain adjustments at fuel stations. The 48-pump E85 footprint, the planned scale-up to 500 outlets by December 2026 and 5,000 by December 2027 reflect that investment in slow motion.

The All India Distillers’ Association, the industry body representing ethanol producers, called the excise waiver a significant step toward advancing India’s ethanol programme. No public estimate of the additional feedstock demand or distillery investment needed to support E22-E30 at scale was cited in the notification or the government’s clarification. The government’s stated position is that higher blends will arrive only after ‘extensive testing and consultation’. An Indian fuel pump today still dispenses only E20, per the standard petrol mandate that came into effect on April 1, 2026.

The 2030 Bet on an E27 National Average

The endgame the three-step build is aimed at is a national average ethanol blend of 27% by 2030. ICIS, reporting on the petroleum ministry’s June 5 statement, said the Indian government hopes to raise India’s overall blend to 27% (E27) by 2030. A Press Information Bureau statement, reported by The Indian Express, said the rollout would help lift aggregate ethanol blending levels to nearly 26% by 2030-31.

The pathway, in the government’s own framing, runs through E85. E85 has been identified as the mono-fuel standard for flex-fuel vehicles in the proposed nationwide flex-fuel ecosystem, Puri said at the launch. The ethanol rollout, on the government’s roadmap, depends as much on the flex-fuel fleet absorbing E85 as on OMCs rolling out the new fuel grades. The excise waiver of June 10 removes the tax drag; the BIS standards of May 19 set the technical bar; the E85 launch of June 5 puts a high-ethanol fuel on a small number of pumps, per the petroleum ministry’s own rollout plan.

How the government wants the next four years to run

1. Standards: IS 19850:2026 covers E22, E25, E27 and E30; published May 19, 2026.
2. Tax framework: Central excise duty waived on E22-E30 petrol; gazette notification June 10, 2026.
3. Flagship fuel: E85 launched June 5, 2026, at 48 public-sector OMC outlets; price about ₹20 per litre below E20.
4. Network build: E85 outlets targeted to scale to 500 by December 2026 and about 5,000 by December 2027.
5. 2030 target: Average national ethanol blend of 27% by 2030, per the petroleum ministry.

Frequently Asked Questions

Is E22, E25, E27 or E30 petrol available at Indian fuel stations right now?

No. The Bureau of Indian Standards notified the fuel standards on May 19, 2026, and the government has explicitly said the excise waiver is a ‘preliminary prerequisite’ for higher blends, not a launch decision. Commercial rollout will follow ‘extensive testing and consultation’, per the government’s own clarification after the June 10 notification.

Can a regular car use E85?

No. E85 is for flex-fuel vehicles only. Petroleum Minister Hardeep Singh Puri said at the June 5 launch that E85 dispensers will display boards reading ‘E85-compliant cars only’. The minister added that E20 vehicles ‘will run for a long time’ on the standard fuel that has been sold across India since April 1, 2026.

How much cheaper is E85 than regular petrol?

E85 is priced about ₹20 per litre below E20 petrol, the standard fuel sold across India since April 1, 2026. The price gap was set in a Press Information Bureau statement issued at the E85 launch so the benefit of domestically produced ethanol is passed on to the consumer.

What changes for India’s broader ethanol programme under the new waiver?

The excise waiver is the third leg of a build that began with the May 19 BIS standards for E22-E30 fuels and continued with the June 5 E85 launch. The petroleum ministry’s own target is to raise India’s average ethanol blend to 27% (E27) by 2030. The E85 network is planned to scale from 48 outlets today to about 5,000 by December 2027.