Sugar stocks rose up to 3.5% after the government exempted petrol blended with 22%-30% ethanol from excise duty.
Dhampur Sugar, Dwarikesh Sugar, Balrampur Chini and Bajaj Hindusthan were among the key gainers.
The move is expected to boost ethanol demand, support sugar companies' revenues and advance India's ethanol blending programme.
Sugar stocks gained up to 3.5% in early trade on Thursday after the Centre exempted petrol blended with higher levels of ethanol from excise duty, a move seen as positive for ethanol producers and sugar companies.
At around 9:31 a.m., shares of Dhampur Sugar Mills surged 3.5%, while Dwarikesh Sugar rose 2.7%. Balrampur Chini Mills, Bajaj Hindusthan Sugar and Dalmia Bharat Sugar also traded 1.5%-2% higher.
1 June 2026
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The rally followed a notification issued by the Ministry of Finance under the Department of Revenue, which abolished excise duty on petrol blended with 22% to 30% ethanol.
The move is expected to support the government's ethanol blending programme and improve demand visibility for ethanol producers, many of which are sugar manufacturers.
According to the notification published in The Gazette of India, petrol containing between 22% and 30% ethanol will qualify for a nil excise duty rate, subject to specified conditions.
The government outlined detailed composition requirements for the eligible fuel blends. For 22% ethanol-blended petrol, the fuel must comprise 78% motor spirit (petrol) and 22% ethanol by volume, with applicable taxes already paid on both components. The blend must also conform to Bureau of Indian Standards (BIS) specification IS 19850.
Similarly, 30% ethanol-blended petrol must consist of 70% petrol and 30% ethanol by volume and comply with the same BIS standards.
Market participants viewed the decision as a positive step towards accelerating ethanol adoption and enhancing revenue opportunities for sugar companies that have diversified into ethanol production.
The policy also aligns with the government's broader objective of reducing dependence on imported crude oil and promoting cleaner fuel alternatives through higher ethanol blending levels.
