Budget 2022: Rs 2/litre differential on non-blended fuel to be charged from 1 October; know what it means to your pocket?

Budget 2022: The government wants to encourage use of blended fuel and “that’s the simple message in that”, Finance Minister Nirmala Sithraman today said while responding to a question if the customers taking fuel from retailers selling non-blended fuel will have to pay a differential of Rs 2 extra per litre from 1 October 2022.

Revenue Secretary Tarun Bajaj said that the move is to push the petroleum companies to do [ethanol] blending. “Our desire is not to collect this tax because the tax will be very minimal but the desire is that the blending happens…to that extent it benefits the country,” he added.

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“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/ litre from the 1st day of October 2022,” the FM said in her budget speech.  

India has an ambitious plan of 20% blending by 2025. The country has made steady progress in raising the share of ethanol in auto-fuels, having increased it to 8.1 per cent in Ethanol Supply Year (ESY) 2020-21 (December-November) from 5 per cent a year earlier.

Finance Minister Nirmala Sithraman today presented Budget 2022. This was her fourth budget and third full budget.