India Scraps Petrol Export Duty, Hikes Diesel Levy
The Union government has abolished the Rs 2.50 per litre export duty on petrol while increasing levies on diesel and aviation turbine fuel (ATF), effective October 31, 2026. The Finance Ministry announced the revised rates amid continuing volatility in international energy markets caused by the West Asia conflict. The changes are intended to balance domestic fuel availability with export activity and evolving international petroleum prices.
Petrol Export Duty Scrapped, Diesel Levy Raised
Under the revised structure, the special additional excise duty (SAED) on petrol exports has been reduced from Rs 2.50 per litre to zero.
The combined levy on high-speed diesel exports has increased from Rs 8.50 to Rs 11.50 per litre, representing a rise of Rs 3 per litre.
Meanwhile, the export duty on aviation turbine fuel has increased by 50 paise, from Rs 10.50 to Rs 11 per litre.
The revised rates were notified by the Department of Revenue and came into effect immediately upon publication in the Official Gazette.
West Asia Conflict Influences India’s Fuel Export Policy
The government introduced export duties on diesel and aviation fuel on March 27, 2026, amid concerns over international supply disruptions and rising crude oil prices.
The levy was subsequently extended to petrol exports in May.
The measures were designed to discourage excessive petroleum exports and protect domestic supplies during a period of uncertainty in global energy markets.
Since their introduction, the duties have been reviewed approximately every fortnight, taking into account international prices of crude oil and refined petroleum products.
No Change in Domestic Petrol and Diesel Duties
The Finance Ministry clarified that the latest revisions apply to petroleum products intended for export and do not change existing duties on petrol and diesel sold for domestic consumption.
Consequently, the notification does not directly alter retail fuel prices at Indian petrol pumps.
The increase in diesel and aviation fuel export duties could affect refining companies’ export margins, while removing the petrol levy may improve the economics of overseas petrol sales.
Further revisions will depend on international petroleum prices and the government’s assessment of domestic supply requirements.
