New Delhi – India's government has announced significant revisions to its windfall tax on fuel exports, effective July 1. The changes see a reduction in export duties for diesel and aviation turbine fuel (ATF), alongside an increase in the export duty for petrol.
Export Duty Adjustments
The revised tax structure aims to balance domestic supply needs with global market dynamics. The export duty on diesel has been reduced to ₹8.5 per litre, down from the previous ₹14 per litre. Similarly, the export tax on aviation turbine fuel (ATF) now stands at ₹7.5 per litre, a decrease from ₹12.5 per litre.
Conversely, the government has increased the export duty on petrol to ₹4 per litre, up from ₹1.5 per litre. This move is intended to ensure adequate availability of petrol within the domestic market.
Why the Changes?
These adjustments come in response to a notable fall in global crude oil prices. International benchmarks, which had previously soared above $126 per barrel, have seen a sharp decline. Analysts attribute this easing of prices to reduced geopolitical tensions and the normalization of shipping routes, particularly through the Strait of Hormuz, alleviating concerns about prolonged supply disruptions.
Economists now project Brent crude to average around $84.50 per barrel in 2026, a downward revision from earlier forecasts. The government's decision reflects a proactive approach to align domestic tax policies with evolving international oil market conditions.
Existing Exemptions Remain
When the export levy was initially introduced, exports of petrol, diesel, and aviation turbine fuel by public sector oil companies to neighboring countries such as Nepal, Bhutan, Bangladesh, and Sri Lanka were exempted. This exemption policy remains in effect under the new revised rates.