Sugar Stocks Surge as Government Waives Excise Duty on High-Ethanol Petrol Blends
The sugar sector witnessed a significant rally, with stocks rising following the government's decision to abolish excise duty on petrol blended with high levels of ethanol. This policy intervention is expected to provide a substantial boost to the industry players.Sugar shares climbed up to 2.5% in trading on June 11th. The move comes after official notifications were released by the Ministry of Finance under the Department of Revenue, as published in The Gazette of India.
Sugar Industry Reacts Strongly to Excise Duty Waiver
Several key sugar companies led the positive market sentiment. At 9:31 am on June 11, Dhampur Sugar Mills and Dwarikesh Sugar led the gains among sugar stocks, rising by 3.5% and 2.7%, respectively.Balrampur Chini, Bajaj Hindusthan Sugar, and Dalmia Bharat also saw marked increases, trading 1.5%-2% higher on the day due to the announcement. The sector remains highly optimistic following this duty relief measure.
Details of Government's Ethanol-Blended Fuel Policy
The government notification specifies that petrol containing between 22% and 30% ethanol will be fully exempt from excise duty. This exemption is tied to precise structural composition rules for each fuel blend.The Gazette details the requirements for a qualified blend, stating that "22% ethanol blended petrol" must consist of 78% motor spirit (petrol) and 22% ethanol, with all components having paid appropriate taxes.
Similar rigorous parameters apply to the higher percentage mixtures. For instance, the "30% ethanol blended petrol" is defined as a blend containing 70% motor spirit and 30% ethanol, conforming to the Bureau of Indian Standards specification IS 19850.
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