India Cuts Windfall Tax on Fuel Exports
Export duties on diesel and aviation turbine fuel fall from October 1, while the petrol export levy remains unchanged.
India has reduced the windfall tax on exports of diesel and aviation turbine fuel (ATF), with the revised rates taking effect from October 1, according to a government order issued on September 30. The move lowers the tax burden on exporters of the two petroleum products.
The export duty on diesel has been reduced to Rs 16 per litre from Rs 20 per litre, while the levy on ATF has been cut to Rs 10.5 per litre from Rs 15 per litre. The duty on petrol exports remains unchanged at Rs 0.5 per litre.
BY THE NUMBERS
From October 1, the diesel export levy will be Rs 16 per litre and the ATF levy Rs 10.5 per litre, compared with Rs 20 and Rs 15 respectively under the previous rates.
India reviews export levies on petroleum products every fortnight, adjusting them in response to movements in international crude oil and refined-product prices. The latest reduction follows another cut announced on September 16, when the diesel levy was lowered to Rs 20 per litre and the ATF levy to Rs 15 per litre.
The government first introduced windfall taxes on fuel exports in July 2022 to capture extraordinary gains during a period of elevated oil prices. The levy was withdrawn two years later and reintroduced in March 2026 after crude prices surged amid the US-Israeli conflict with Iran.
DOMESTIC FUEL UNCHANGED
The latest notification changes export levies only. Existing duty rates on petrol and diesel cleared for domestic consumption remain unchanged.
The export-duty framework has been used to balance overseas sales with domestic fuel availability during periods of volatile international energy prices. Lower export levies can reduce the tax burden on refiners selling diesel and ATF overseas, while the fortnightly review mechanism allows the government to adjust rates as market conditions change.
The latest decision comes as global oil markets remain sensitive to developments in West Asia and disruptions to regional energy supplies. The impact of those conditions on international crude and refined-product prices will remain relevant to India's subsequent fortnightly export-tax reviews.