Rs 2/ltr further excise obligation on petrol postpone by one month; diesel by six months

The authorities has postpone by one month the levy of an extra Rs 2 per litre excise obligation on petrol that’s not doped with ethanol and by six months for diesel not blended with bio-diesel in a bid to offer the trade extra time to implement the measure.

The finance ministry, in a Gazette notification issued late on Friday (September 30), acknowledged that the extra excise tax on petrol will now be levied from November 1, 2022, and that on diesel from April 2023.

Union Finance Minister Nirmala Sitharaman had in her Budget for the fiscal 12 months starting April 2022 introduced a Rs 2 per litre further levy on petrol and diesel that’s not blended with ethanol and bio-diesel, respectively. This obligation was to be relevant from October 1, 2022, however now has been differed to November 1 for petrol and April 1, 2023 for diesel.

Presently, 10 per cent ethanol, extracted from sugarcane or surplus foodgrain, is mixed or blended in petrol (which means 10 per cent of ethanol blended with 90 per cent of petrol) with a view to slicing oil import dependence and offering farmers with an extra supply of earnings.

But there may be solely an experimental mixing of bio-diesel, extracted from non-edible oilseeds, in diesel — essentially the most used gasoline within the nation.

“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 1st day of October 2022,” Sitharaman had acknowledged in her Budget speech within the Lok Sabha on February 1.

In the September 30 notification, her ministry acknowledged that “petrol which is intended for retail sale, not so blended with ethanol or methanol” will entice Rs 3.40 per litre primary excise obligation efficient November 1, 2022, as a substitute of Rs 1.40 a litre at the moment.

Branded petrol, not doped with ethanol, will entice Rs 4.60 a litre excise obligation as towards Rs 2.60 at the moment.

In the case of diesel, it mentioned the gasoline “intended for retail sale, not so blended with alkyl esters of long chain fatty acids obtained from vegetal oils, commonly known as bio-diesels” shall entice Rs 3.80 a litre primary excise obligation as a substitute of Rs 1.80. Branded diesel will entice Rs 6.20 a litre primary excise levy as towards Rs 4.20 at the moment.
Besides primary excise obligation, cess and particular further excise obligation is levied on petrol and diesel. The whole incidence of excise on petrol involves Rs 19.90 a litre and that on diesel to Rs 15.80.

While the extra obligation will push oil firms to acquire extra ethanol for mixing in petrol and prepare for logistics for transporting to poor areas, it’s unlikely that the nation will be capable to construct infrastructure to fabricate bio-diesel within the scale wanted for mixing in diesel, trade officers mentioned.

Last 12 months, the federal government introduced ahead the goal to attain 20 per cent ethanol mixing with petrol to 2025, 5 years forward of its earlier goal, to assist scale back its dependence on expensive oil imports. 10 per cent ethanol mixing was achieved earlier this 12 months.

India is the world’s third-biggest oil importer, counting on international suppliers to fulfill greater than 85 per cent of its oil demand.