Ethanol blended petrol
will carry an excise duty concession of 30 paise per litre. The
notification to this effect has been issued by the Ministry of
Finance on 31.12.2002.
As per the notification,
the additional excise duty on petrol has been reduced from the
normal rate of Rs. 6 per litre to Rs. 5.70 per litre for petrol
to be sold after blending with ethanol. A portion of the concession
will be utilised by the oil companies to meet the extra cost of
blending operation, additives, etc. The remaining concession will
be passed on to the consumers in the form of lower price of the
new product. It is expected that the retail prices of gasohol
will be lower by about 15 to 20 paise per litre as compared to
the normal rate of petrol. However, the actual reduction would
depend on the detailed working by oil companies, local taxes etc.
To encourage the
use of ethanol in petrol, Shri Ram Naik, Minister of Petroleum
& Natural Gas had requested the States to exempt the sales
tax payable on ethanol to be used for blending with petrol. The
Government of Andhra Pradesh has already issued a notification
in this regard. The Chief Minister of Maharashtra has assured
to grant similar concession. Uttar Pradesh Government has also
agreed to consider the proposal of the Union Petroleum Ministry
for sales tax exemption. The concessions in the excise duty by
the Union Government and in the sales tax by the State Governments
would help in selling ethanol-blended petrol at a price lower
than the normal rate of petrol. This in turn, would promote increased
used of ethanol in petrol, which would help millions of sugarcane
producers in the country.
It may be recalled
that Shri Ram Naik at a public function organised in Mumbai on
1st January 2003, launched introduction of environment
friendly ethanol blended petrol in the States of Maharashtra,
Andhra Pradesh, Uttar Pradesh and Punjab. The supply of the new
product in these States and in the States of Karnataka, Tamil
Nadu, Gujarat, Goa and Haryana and in the Union Territories of
Chandigarh, Daman & Diu, Dadra & Nagar Haveli and Pondicherry
will be completed by June 2003. The rest of the country will be
covered in the second phase.
