Union minister Nitin Gadkari said on Wednesday that ethanol prices are expected to decline further as the government works to expand biofuel adoption and address tax-related hurdles.
Speaking at an industry event, Gadkari said discussions are underway to rationalise goods-and-services-tax rates on ethanol-blended fuels. Currently, fuels containing less than 20% ethanol attract 5% GST, while blends with more than 20% ethanol are taxed at 18%.
"The finance minister has said we'll take this up in the next GST Council meeting," Gadkari said, adding that reducing the tax burden could help narrow the price gap between ethanol and petrol.
The minister also revealed that work is underway on isobutanol fuel, which he described as a potential direct replacement for diesel in the future.
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Highlighting developments in the aviation sector, Gadkari said: "The era of sustainable aviation fuel is here," adding that airlines could soon begin adopting sustainable aviation fuel at scale. He said an aviation-turbine-fuel price stabilisation fund could support the transition.
Gadkari also asserted that India has sufficient food grain and water resources to support the country's growing biofuel ambitions.
Earlier, Petroleum and Natural Gas Minister Hardeep Singh Puri said that 1% shift in India's annual petrol vehicle sales to ethanol-powered vehicles could generate foreign exchange savings of nearly Rs 195 crore during an ethanol supply year.
Speaking at an event in New Delhi, Puri said the launch of mass-market flex-fuel mobility marks a significant step in India's efforts to reduce dependence on imported fossil fuels and promote cleaner transportation alternatives.
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The minister said E85 fuel, a blend containing up to 85% ethanol, will be made available through designated dispensing stations across the country. He added that E85 would be "substantially cheaper than normal fuel," making it an attractive option for consumers.
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