Big Fuel Tax Change! Govt Raises Diesel, ATF Export Levy, Cuts Petrol Duty

The Central government has once again revised the windfall tax on petroleum exports, increasing the levy on diesel and Aviation Turbine Fuel (ATF) while reducing the tax on petrol exports . The revised rates came into effect on July 16 as part of the government's fortnightly review of export duties.

According to a notification issued by the Finance Ministry , the Special Additional Excise Duty (SAED) on diesel exports has been raised to Rs 15.5 per litre , up from Rs 8.5 per litre . Similarly, the levy on ATF exports has been increased to Rs 14.5 per litre , compared to Rs 7.5 per litre applicable until July 15.

In contrast, the government has reduced the export duty on petrol to Rs 2.5 per litre , down from Rs 4 per litre . The revised tax structure is effective immediately and will remain in force until the next scheduled review.

The Centre has been revising these duties every two weeks since March 27 , when it first imposed export taxes on diesel and ATF following heightened geopolitical tensions in West Asia that triggered volatility in global crude oil prices. Later, from May 16 , the government also introduced an export duty on petrol .

Officials clarified that there is no change in the existing duties on petrol and diesel supplied for domestic consumption , meaning fuel sold within the country will continue to attract the same tax rates as before.

The windfall tax mechanism was introduced to ensure adequate domestic fuel availability during a period of elevated international demand and price fluctuations. By making exports relatively less attractive during periods of high global prices, the government aims to discourage excessive overseas shipments and safeguard domestic supplies.

The policy also seeks to prevent exporters from making disproportionate gains due to the gap between domestic and international fuel prices when crude oil markets witness sharp movements. With uncertainty in West Asia continuing to influence global energy markets, the government is expected to keep reviewing the export duty structure based on prevailing market conditions.