Govt Imposes Windfall Tax on Petrol Exports, Cuts Levies on Diesel and ATF

The government has introduced a fresh round of changes in fuel export taxation , imposing a windfall gains tax on petrol exports while reducing levies on diesel and aviation turbine fuel (ATF) , in a move aimed at balancing domestic supply needs with global market pressures.

According to an official notification issued by the Finance Ministry, a special additional excise duty of Rs 3 per litre has been imposed on petrol exports effective May 16. This marks the first such levy on petrol since the beginning of the West Asia crisis .

At the same time, the government has reduced the export duty on diesel to Rs 16.5 per litre , down from Rs 23 per litre. The levy on ATF has been cut to Rs 16 per litre from Rs 33 per litre.

The notification also stated that the road and infrastructure cess on petrol and diesel exports has been reduced to nil. However, there is no change in domestic fuel tax rates , keeping local prices stable for consumers.

The latest revision follows a series of frequent adjustments in recent months. On March 26, export duties were first imposed on diesel and ATF, which were later revised multiple times in April in response to shifting global crude oil conditions and geopolitical tensions.

Officials said the windfall tax on petrol exports has been introduced to discourage excessive overseas shipments and ensure adequate domestic availability of fuel. The move comes amid elevated global crude prices, which have stayed above $100 per barrel , compared to around $73 before tensions escalated in West Asia.

The government said the broader objective is to prevent exporters from gaining undue advantage from global price fluctuations while safeguarding energy security at home during a period of international uncertainty.

The latest decision reflects a calibrated policy approach, where export duties are continuously adjusted in line with changing global oil market dynamics and geopolitical developments.