Review levy on ethanol, Centre writes to Punjab Govt

The Union Ministry of Petroleum and Natural Gas has written to the Punjab Government to reconsider the fee levied on ethanol production in its excise policy, stating that the move may hamper the ethanol blending programme and escalate fuel prices.

Additional Secretary in the Union Ministry of Petroleum and Natural Gas in the letter to Punjab Chief Secretary KAP Sinha said the provision to levy a regulatory fee (ethanol permit/pass) in the excise policy could restrict the free movement of ethanol within and outside the states. This, it noted, would ultimately increase the cost of ethanol-blended petrol.

“It has been brought to the ministry’s notice by oil marketing companies (OMCs) that as per the excise policy 2025–27 of Haryana, there is a substantial increase in the licence fee/annual renewal fee for distilleries.,” it stated.

The ministry has also pointed out that Punjab has made significant contributions to the success of this programme by achieving a blending percentage of 18.8 in the ESY 2024-25 as on March 2025. It has been brought to the ministry’s notice by the OMCs that as per the excise policy of Punjab, there is a substantial increase in the licence fee, annual renewal fee and capacity enhancement fee for distilleries.”