The government has lowered Goods and Services Tax rate to five per cent from 18 per cent on ethanol meant for blending under the Ethanol Blended Petrol Programme. Minister of State for Petroleum and Natural Gas Rameswar Teli said this in a written reply to a question in the Lok Sabha today. He said, the decision was taken to promote ethanol blending.

The procurement price of ethanol produced from sugarcane-based feed stocks like heavy molasses, sugarcane juice, sugar, sugar syrup is fixed by the Government and from food grain-based feed stocks by Public Sector Oil Marketing Companies on an annual basis. It has promoted usage of biofuel in the country by notification of the National Policy on Biofuels - 2018 which allows the use of multiple feedstocks for producing bio-ethanol for an increased supply of ethanol for blending with petrol.