Page 50 - Policy Economic Report - August 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

domestically, petrol and diesel prices have reduced to Rs. 94.77 and Rs. 87.67 per litre respectively (Delhi
prices) from Rs. 110.04 and Rs. 98.42 per litre in November 2021.

He stated that the Central Government reduced excise duty by Rs. 13/litre on petrol and Rs. 16/litre on
diesel in two tranches in November 2021 and May 2022, fully passing the benefit to consumers. Some
State Governments also reduced VAT to provide further relief. In March 2024, OMCs reduced retail prices
of petrol and diesel by Rs. 2 per litre each. In April 2025, excise duty on petrol and diesel was increased
by Rs. 2 per litre each, but this was not passed on to consumers.

Shri Puri informed that PSU OMCs have carried out intra-state freight rationalisation, benefiting
consumers in remote areas by reducing petrol and diesel prices in far-flung regions. This has also reduced
the difference between maximum and minimum retail prices within a state.

The Government also took several measures to insulate citizens from high international prices, including
diversifying the crude import basket, invoking provisions of Universal Service Obligation to ensure
availability of petrol and diesel in the domestic market, and augmenting domestic exploration and
production of crude oil. Additionally, the Government is promoting ethanol blending and enhancing the
share of renewable energy in India’s energy basket.

Replying to a question on Government’s strategy to promote alternative energy sources, Shri Puri stated
that the Government is actively encouraging the adoption of CNG, LNG, Hydrogen, biofuels including
ethanol, and electric vehicles.

The National Policy on Biofuels – 2018 had set a target of 20% ethanol blending in petrol and 5% biodiesel
blending in diesel by 2030. This target was subsequently advanced to 2025-26. During the ongoing Ethanol
Supply Year (ESY) 2024-25, Public Sector OMCs have achieved an average blending of 19.05% as on
31.07.2025, with 19.93% blending achieved in July 2025.

To promote biofuels, the Government has implemented initiatives such as the Ethanol Blended Petrol
(EBP) Programme, Biodiesel blending programme, and the SATAT initiative for marketing Compressed Bio
Gas (CBG) along with CNG.

Further, steps have been taken to boost biofuel production across the country, including rural India. These
include pricing incentives, opening alternate routes for ethanol production, notifying the Pradhan Mantri
JI-VAN Yojana for establishing second-generation ethanol bio-refineries using agri-residues, SATAT
initiative for CBG and bio-manure production from waste and biomass, and an interest subvention scheme
for enhancing and expanding ethanol distillation capacity.

Ethanol Blending Boosts Farmers’ Income and Rural Economy: Petroleum Minister Hardeep S. Puri

The Government has achieved remarkable progress in promoting biofuels as a sustainable alternative to
petroleum products, stated Union Minister of Petroleum and Natural Gas, Shri Hardeep Singh Puri, in a
written reply to a starred question in Lok Sabha.

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