NEW DELHI: Diesel in most parts of the country may cost Rs 2 per litre more from October 1 while petrol in a few places such as North East may see a price hike after Finance Minister Nirmala Sitharaman levied additional excise duty on fuel sold without blending it with ethanol or biodiesel.
Presently, 10 per cent ethanol, extracted from sugarcane or surplus foodgrain, is blended or mixed in petrol (meaning 10 per cent of ethanol mixed with 90 per cent of petrol) with a view to cutting oil import dependence and providing farmers with an additional source of income.
Ethanol-blended petrol is supplied in 75-80 per cent of the country as availability of ethanol and logistics hamper supply in remaining areas.
On the other hand, there is only an experimental blending of biodiesel, extracted from non-edible oilseeds, in diesel - the most used fuel in the country.
"Blending of fuel is a priority of this Government. To encourage the efforts for blending of fuel, unblended fuel shall attract an additional differential excise duty of Rs 2 per litre from the 1st day of October 2022," Sitharaman said in her Budget speech in the Lok Sabha.
Earlier, Indian Oil Corporation Ltd. has planned to roll out 10 per cent Ethanol Blended Petrol (E10) across the seven north-eastern States with a 100 per cent rollout in Guwahati.
The blending of 10 per cent ethanol in petrol in India is a practice that is nearly two decades old now and has been implemented across the country. Implementation in the Northeast was held up till now due to the unavailability of a sufficient quantity of Ethanol.
Currently, in India, nearly 85 per cent of the crude oil is imported. Thus, being an import-dependent country, blending ethanol helps reduce the amount of crude oil imported and helps in improving India's balance of payments.
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