Centre cuts windfall tax on diesel exports, raises levy on petrol

The Centre has cut the diesel export levy to ₹8.50 a litre and raised the petrol levy to ₹2.50, while keeping the aviation turbine fuel duty unchanged amid rising oil prices.

The Centre has cut the windfall tax on diesel exports while raising the levy on petrol exports for the fortnight beginning 16 October, amid escalating tensions in West Asia and rising oil prices.

The combined rate of special additional excise duty (SAED) and road and infrastructure cess on diesel exports has been cut to ₹8.50 per litre from ₹16 per litre. The SAED on petrol exports has been raised to ₹2.50 per litre from ₹0.50 over the previous fortnight. The levy on aviation turbine fuel (ATF) remains unchanged at ₹10.50 per litre.

Amid escalating tensions in West Asia, the government imposed an export duty on diesel and ATF on 27 March, revising the rates every fortnight. The levy was extended to petrol exports from 16 May.

The ministry also said there was no change in the existing duty rates on petrol and diesel cleared for domestic consumption.

Domestic supply

The windfall tax was introduced to ensure domestic availability of petroleum products by discouraging exports during the West Asia war. It was also intended to prevent exporters from taking undue advantage of the price differential between domestic and international markets as global crude oil prices rose after the conflict began.

Although India is a net importer of crude oil, importing about $123 billion worth annually, it also exports petroleum products such as petrol, diesel and jet fuel worth about $45 billion.

Reliance Industries is India’s largest petroleum product exporter, while state-run oil marketing companies also cater to overseas markets. India is the world’s seventh-largest exporter of petroleum products, according to the petroleum ministry.

Refining capacity

With the world’s fourth-largest crude refining capacity of more than 258 million tonnes, India is also seeing record growth in domestic petroleum product consumption.

In fiscal year 2026, domestic petroleum product consumption touched a high of 243 million tonnes, while exports stood at 61.43 million tonnes, according to data from the Petroleum Planning and Analysis Cell (PPAC).

Amid tensions in West Asia, oil prices have increased around 10% in the past two weeks. Around 7:50 AM, the December contract of Brent on the Intercontinental Exchange was trading at $105.5 per barrel, lower by 0.39% from its previous close.

About the Author

Rituraj Baruah is a special correspondent covering energy, housing, urban affairs, heavy industries and small businesses at Mint. He has reported on diverse sectors over the last eight years including, commodities and stocks market, insolvency and real estate; with previous stints at Cogencis Information Services, Indo-Asian News Service (IANS) and Inc42.