The Centre has scrapped the additional excise duty on petrol exports while raising export taxes on diesel and aviation turbine fuel (ATF), according to Finance Ministry notifications issued on Saturday.
The revised rates eliminate the Rs 2.50 per litre duty on petrol exports, raise the diesel levy by Rs 3 per litre and increase the ATF export duty by Rs 0.50 per litre.
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Under the new structure, diesel exports will attract a levy of Rs 11.50 per litre, compared with Rs 8.50 earlier. The duty on ATF exports has increased to Rs 11 per litre from Rs 10.50. Petrol exports, meanwhile, will no longer attract the additional excise duty.
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Government Revises Fuel Export Duties Amid Global Supply Concerns
The latest changes is to curb disruptions in international energy markets following the conflict in West Asia. The government initially introduced export levies in late March as escalating geopolitical tensions disrupted crude oil supplies and pushed international prices higher.
The restrictions were intended to ensure that domestic fuel requirements received priority over overseas markets. With international prices offering attractive export opportunities, the government sought to discourage refiners from diverting a larger share of their production abroad.
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India's exposure to disruptions in the Middle East remains significant. Before the conflict, approximately 45% of the country's crude oil imports passed through the Strait of Hormuz, a critical shipping route connecting the Persian Gulf with international markets.
The disruptions to commercial shipping through the passage forced India to diversify its crude sourcing and manage additional supply risks.
Retail Fuel Prices Remain Under Government Watch
The changes come at a time when global oil markets remain uncertain due to supply disruptions, rising shipping costs and geopolitical tensions. Despite pressure on international crude prices, the government has kept domestic petrol and diesel prices unchanged to limit the impact on consumers.
Export levies remain one of the policy tools available to influence domestic fuel availability and refinery export decisions. The latest revision changes the tax treatment of different petroleum products while allowing petrol exports to proceed without the additional duty.
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