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India cuts export duty on diesel, jet fuel

India has reduced export duties on diesel and aviation turbine fuel (ATF), offering some relief to refiners as global oil prices remain volatile. The new rates came into effect on May 1.

Export duty on diesel has been brought down to ₹23 per litre from ₹55.5, while jet fuel duty has been reduced to ₹33 per litre from ₹42. There is no export duty on petrol. Despite these changes, taxes on fuels sold within the country remain unchanged.

The decision comes at a time when global crude oil prices have surged due to ongoing geopolitical tensions and supply concerns, particularly in West Asia. As a major importer of crude oil, India is sensitive to such fluctuations, which can impact both fuel availability and pricing.

Earlier, the government had raised export duties to ensure enough fuel stayed within the country and to prevent companies from exporting more for higher profits. The latest move signals a shift, allowing refiners more flexibility while still keeping domestic supply stable.

For consumers, there is no immediate impact, as petrol and diesel prices at the pump remain steady. The government has maintained these rates to avoid passing on the burden of rising global prices to the public.

The changes also come as the aviation sector faces higher fuel costs, with ATF being a major expense for airlines. Lower export duties may help ease some of the pressure on fuel supply and pricing.

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Petrol duty reduced to ₹3, diesel to zero

The central government on March 27, 2026, announced a major cut in excise duty on petrol and diesel to reduce the impact of rising global oil prices. The duty on petrol has been reduced from ₹13 to ₹3 per litre, while diesel duty has been cut from ₹10 to zero, effectively lowering taxes by ₹10 per litre on both fuels.

This move comes as crude oil prices have surged due to ongoing tensions in the Middle East. Supply concerns, especially around key oil routes, have pushed prices above $100 per barrel. As India depends heavily on oil imports, this has increased pressure on fuel prices and the overall economy.

The government said the decision was taken to protect consumers from a sharp rise in petrol and diesel prices. By reducing taxes, it aims to absorb part of the global price increase instead of passing the entire burden onto the public.

However, the benefit may not be immediately visible at petrol pumps. Oil marketing companies like Indian Oil, BPCL, and HPCL are currently facing losses because they have not fully raised fuel prices in line with global crude rates. Industry experts believe these companies may use the tax relief to recover losses before lowering retail prices.

Crude oil prices have seen a steep rise in recent weeks, jumping from about $70 per barrel to over $100. This sudden increase has made fuel costlier to produce and sell, creating challenges for both companies and the government.

To manage the situation, the government has also introduced export duties on petroleum products. This step is meant to ensure enough fuel supply within the country and to control price fluctuations.

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No immediate rise in petrol, diesel prices

The government has decided not to raise petrol and diesel prices immediately, even though global crude oil prices have crossed $100 per barrel. Officials said the situation in international oil markets is being closely monitored before any decision on fuel price changes is taken.

For now, oil marketing companies are likely to absorb the higher cost of crude instead of passing it on to consumers. The rise in global oil prices has mainly been driven by geopolitical tensions in West Asia, which have increased concerns over supply disruptions.

Authorities also said that India currently has enough fuel stocks, ensuring stable supply across the country.