Some parts of Jharkhand and its adjoining states may witness higher petrol prices with the finance minister’s decision to hike excise duty on unblended fuel. According to oil marketing companies' officials, consumers in parts of eastern states with negligible fuel blending infrastructure are going to be impacted by the Rs 2 per litre additional excise duty.
Highlighting Centre's focus, Finance Minister Nirmala Sitharaman said, “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 a litre from the first day of October 2022.”
“There are some places in states where logistics are not in place because of unavailability of any blending infrastructure. These are the regions where this Rs 2 per litre additional duty will be levied,” a senior oil marketing company official told Business Standard.
“The blending capability varies across depots in a state. So, in a large state where there are multiple fuel depots, the cost of petrol is likely to vary by Rs 2 a litre with the imposition of the differential excise duty on blended and unblended fuels,” the official added.
The onus of blending ethanol with fuel is on oil marketing companies that procure the biofuel in bulk and then mix it with petrol at their depots.
India had achieved the highest-ever ethanol blend of 8.1 per cent with petrol in the ethanol supply year 2020-21 (from December to November). The government has set a target of achieving a nationwide average blending of 10 per cent in the current supply year.
Prime Minister Narendra Modi has recent set a target of achieving a 20 per cent blending target by the year 2025.
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