Govt Implements Measures To Boost Ethanol Production, Ease Edible Oil Prices
In a move to prioritise ethanol production for blending with petrol, the Indian government has imposed a 50 per cent export duty on molasses, a crucial ingredient in ethanol manufacturing. The decision, effective from 18 January 2024, aims to ensure a higher availability of ethanol and support the country's efforts to reduce its import fuel bill.
Ethanol blending with petrol has been a key strategy to enhance fuel efficiency and reduce dependency on imported fuels. India successfully achieved a 12 per cent blending of ethanol with petrol in the Ethanol Supply Year (ESY) 2022-23 and is now targeting 15 per cent blending for ESY 2023-24. The ESY runs from November to October.
In a parallel move, the Finance Ministry has extended the existing duty rates on the import of crude and refined edible oils, including palm, soybean, and sunflower, until 31 March 2025. This extension, originally set to expire on 31 March 2024, aims to ensure a stable supply of essential kitchen commodities at reasonable prices. The decision is particularly crucial amid concerns about the impact of mustard production on edible oil prices.
Simultaneously, the government has announced a reduction in the windfall levy, officially known as Special Additional Excise Duty (SAED), on domestically produced crude oil. Effective from Tuesday, the SAED on crude oil has been lowered from Rs 2,300 per tonne to Rs 1,700 per tonne. This reduction is attributed to the decline in global crude prices.
Notably, the windfall levy on export-bound diesel, Aviation Turbine Fuel (ATF), and petrol will continue to be NIL, providing relief to these sectors. These measures collectively reflect the government's commitment to balancing energy needs, supporting domestic industries, and ensuring essential commodities remain accessible to the public.
