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What is the story about?
Shares of sugar companies like Balrampur Chini Ltd., Dhampur Sugar Ltd. and others gained up to 4%, while ethanol-focused firms such as Praj Industries opened higher but gave up gains on Thursday, June 11, after the Centre exempted higher ethanol-blended petrol variants from excise duties, a move aimed at accelerating ethanol adoption and boosting demand for biofuels.
The government has granted excise duty exemptions on fuels blended with 22%, 25%, 27% and 30% ethanol. The exemption covers four key levy components — Basic Excise Duty, Special Additional Excise Duty, Road and Infrastructure Cess, and Agriculture Infrastructure and Development Cess.
The decision is expected to support the next phase of India's ethanol blending programme by improving the economics of higher ethanol blends and encouraging wider adoption by fuel retailers and consumers.
Industry reports suggest the move could significantly improve ethanol production capacity utilisation, which is currently estimated at around 50%.
The development is seen as positive for sugar mills, many of which have invested heavily in expanding distillery capacities over the past few years to cater to rising ethanol demand under the government's blending targets.
Higher ethanol offtake could improve returns on those investments and provide an additional revenue stream for sugar producers, particularly at a time when the sector is increasingly diversifying beyond traditional sugar production.
Also read: Lenskart shares worth nearly ₹2,000 crore change hands in a block deal; ADIA unit likely seller
The announcement is also expected to benefit Praj Industries, a leading provider of ethanol production technology and bioenergy solutions, as increased demand for ethanol could drive fresh investments in distillery and biofuel infrastructure.
Shares of Balrampur Chini are trading 2.4% higher on Thursday at ₹549.5, while those of Dhampur Sugar are trading 2.8% higher at ₹145.28. Shares of Dwarikesh Sugar are up 3.7% at ₹45.2. On the flip side, shares of Praj Industries gave up opening gains, now trading 0.2% lower at ₹343.
What Is The Latest Government Decision On Excise Duty?
The government has granted excise duty exemptions on fuels blended with 22%, 25%, 27% and 30% ethanol. The exemption covers four key levy components — Basic Excise Duty, Special Additional Excise Duty, Road and Infrastructure Cess, and Agriculture Infrastructure and Development Cess.
The decision is expected to support the next phase of India's ethanol blending programme by improving the economics of higher ethanol blends and encouraging wider adoption by fuel retailers and consumers.
Industry reports suggest the move could significantly improve ethanol production capacity utilisation, which is currently estimated at around 50%.
How Does The Excise Duty Decision Benefit Sugar Mills?
The development is seen as positive for sugar mills, many of which have invested heavily in expanding distillery capacities over the past few years to cater to rising ethanol demand under the government's blending targets.
Higher ethanol offtake could improve returns on those investments and provide an additional revenue stream for sugar producers, particularly at a time when the sector is increasingly diversifying beyond traditional sugar production.
Also read: Lenskart shares worth nearly ₹2,000 crore change hands in a block deal; ADIA unit likely seller
The announcement is also expected to benefit Praj Industries, a leading provider of ethanol production technology and bioenergy solutions, as increased demand for ethanol could drive fresh investments in distillery and biofuel infrastructure.
Shares of Balrampur Chini are trading 2.4% higher on Thursday at ₹549.5, while those of Dhampur Sugar are trading 2.8% higher at ₹145.28. Shares of Dwarikesh Sugar are up 3.7% at ₹45.2. On the flip side, shares of Praj Industries gave up opening gains, now trading 0.2% lower at ₹343.
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