India has increased the windfall tax on exports of diesel and aviation turbine fuel (ATF) while reducing the levy on petrol exports, reflecting changes in global crude oil prices and refining margins.
According to a notification issued by the Ministry of Finance, the export duty on diesel has been raised to ₹5.50 per litre from ₹4.50 per litre, while the levy on ATF has increased to ₹2.50 per litre from ₹1.50 per litre. At the same time, the government has reduced the windfall tax on petrol exports to ₹2 per litre from ₹3 per litre.
The revised tax rates came into effect on July 16 and are part of the government’s fortnightly review of windfall taxes. These duties are adjusted regularly based on international crude oil prices and the profit margins earned by refiners on exports.
Windfall taxes were first introduced in 2022 to ensure that the government shares in the extra profits earned by oil producers and refiners when global energy prices surge. The tax also aims to encourage adequate fuel supplies in the domestic market while allowing refiners to continue exporting petroleum products.
The latest revision reflects stronger refining margins for diesel and jet fuel in overseas markets, prompting the government to increase export duties on these products. Lower margins on petrol exports, however, led to a reduction in the tax on gasoline shipments.
India is one of the world’s largest fuel exporters, with private refiners such as Reliance Industries and Nayara Energy accounting for a significant share of overseas shipments. Changes in export duties can influence refiners’ profitability, export volumes and domestic fuel availability.
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