Govt slashes windfall tax on exports of petrol, diesel, ATF exports amid Middle East tensions

PTC News Desk: The government has cut the windfall tax on exports of petrol, diesel and aviation turbine fuel (ATF) The government has reduced export levies on petrol, diesel and aviation turbine fuel (ATF) amid continued volatility in global oil markets.

The revised rates came into effect on September 16 and will remain in place for the next two weeks. The government reviews export duties on petroleum products every fortnight based on international crude oil and fuel prices.

The levy on petrol exports has been cut to ₹0.50 per litre from ₹1.50 per litre. For diesel, the total levy has been reduced to ₹20 per litre from ₹25 per litre, while the export duty on ATF has been lowered to ₹15 per litre from ₹19 per litre.

For diesel, the earlier ₹25-per-litre levy consisted of ₹24 per litre as Special Additional Excise Duty (SAED) and ₹1 per litre as Road and Infrastructure Cess (RIC). Under the revised rates, SAED has been reduced to ₹20 per litre, while RIC has been brought down to zero.

Oil prices remain high 

The tax revision comes as global oil markets remain sensitive to possible supply disruptions in the Middle East.

Crude prices had risen sharply earlier this week after attacks on Saudi Arabian oil infrastructure and disruptions to crude flows raised concerns about global supplies. Tensions involving Iran, the US and Israel, along with risks around the Strait of Hormuz, have added to market uncertainty.

However, oil prices moved lower on Thursday.

Brent crude futures fell around 1.2% to $104.59 per barrel in early trading, while US West Texas Intermediate (WTI) crude declined 1.1% to $101.29 per barrel. Both benchmarks had fallen by around $3 on Wednesday.

The decline came after reports that Saudi Arabia was offering additional crude cargoes to Asian refiners through ship-to-ship transfers near Oman’s Sohar port. This eased some concerns over the immediate impact of supply disruptions.

Global oil markets remain highly sensitive to developments in the Middle East, with supply disruptions and efforts to restore crude flows causing sharp price movements.

India reviews petroleum export levies every two weeks, with rates linked to changes in international crude and petroleum product prices as well as refinery margins. The latest revision partially reverses the increase announced during the previous review on September 1.

No change in domestic petrol and diesel taxes

The reduction in export levies does not mean that the taxes on petrol and diesel sold in India have been reduced.

According to government-linked data and reports on the notification, there has been no change in the existing excise duty rates on petrol and diesel meant for domestic consumption.

This means the lower export duties will not directly make petrol or diesel cheaper for consumers at Indian fuel stations.

India is a major exporter of refined petroleum products, making export duties important for refiners and oil companies selling fuel overseas.

According to PPAC data cited in recent reports, petroleum exports accounted for 22.9% of India’s petroleum, oil and lubricants production and 10.8% of gross exports in June 2026.