Budget 2022: Unblended Petrol, Diesel To Cost Rs 2 More From October 1, Says Nirmala Sitharaman

A few places such as North East may see a price hike in petrol and diesel as the finance minister levied additional excise duty on fuel sold without blending it with ethanol or biodiesel

Currently, 10 per cent ethanol, extracted from sugarcane or surplus foodgrain, is blended or mixed in petrol with an aim to cutting oil import dependence and provide farmers with an additional source of income. Image: Getty

New Delhi: Unblended petrol and diesel to cost Rs 2 more from October 1, 2022, said Finance Minister Nirmala Sitharaman in the Lok Sabha in her Budget speech on Tuesday.

According to a proposal in the Union Budget, the minister 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 per litre from the 1^st day of October 2022.”

A few places such as North East may see a price hike in petrol and diesel as the finance minister levied additional excise duty on fuel sold without blending it with ethanol or biodiesel.

Revenue Secretary Tarun Bajaj at a post-Budget news meet said the blended fuel has been discussed with the petroleum ministry. “We have also collected data on what is not being blended and this is something to push the petroleum companies to ensure that they do the blending. Our desire is not to collect the tax because it would be very minimal. The desire is the blending happens and to an extent, it benefits the country,” he said.

Currently, 10 per cent ethanol, extracted from sugarcane or surplus foodgrain, is blended or mixed in petrol (means 10 per cent of ethanol mixed with 90 per cent of petrol) with an aim to cutting oil import dependence and provide 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.

Union Minister of State for Petroleum and Natural Gas Rameshwar Teli had informed the Lok Sabha in a reply in August that the present percentage of blending of bio-diesel in diesel was less than 0.1 per cent and that of average ethanol blending percentage in petrol was 8 per cent as of July 26, 2021.