The ethanol blended petrol, which is being supplied in the four states of Maharashtra, Andhra Pradesh, Uttar Pradesh and Punjab, will cost 15-20 paisa less than conventional petrol following a 30 paise per litre excise duty relief given by the finance ministry.
"The finance ministry has notified that 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," Petroleum Minister Ram Naik told reporters in New Delhi.
A portion of this concession would be utilised by the oil companies to meet the extra cost of blending operation and additives. "The remaining concession will be passed on to the consumers in the form of lower price of the new product," he said.
To encourage the use of ethanol in petrol, Naik had also requested states to exempt sales-tax payable on ethanol to be used for blending with petrol.
"Andhra Pradesh has already issued a notification in this regard. The chief ministers of Maharashtra and Uttar Pradesh have also assured to grant similar concession," he said, adding concessions in excise duty and sales tax would help in selling ethanol blended petrol at a price lower than the normal petrol.
Stating that ethanol blended petrol has been launched in four states from January 1, Naik said the new product would be introduced in Karnataka, Tamil Nadu, Gujarat, Goa, Haryana, Chandigarh, Daman & Diu, Dadar & Nagar Havelli and Pondicherry by June end.
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