Petrol, Diesel And ATF Export Taxes Cut As Government Eases Windfall Levy

The government has reduced the windfall tax on exports of petrol, diesel and aviation turbine fuel (ATF), bringing down the special levies imposed on petroleum products amid continuing uncertainty in global energy markets.

The revised rates came into effect from September 16 and will remain applicable for the fortnight beginning that day, according to a notification issued by the Finance Ministry.

For diesel exports, the combined Special Additional Excise Duty (SAED) and Road and Infrastructure Cess has been reduced to Rs 20 per litre, from Rs 25 per litre during the previous fortnight.

The SAED on ATF exports has been cut to Rs 15 per litre, compared with Rs 19 per litre earlier.

The sharpest reduction has been made in the levy on petrol exports. The duty has been lowered to 50 paise per litre, from Rs 1.50 per litre in the previous fortnight.

The latest move, however, does not alter the existing duty rates applicable to petrol and diesel sold for domestic consumption.

The government had introduced export duties on diesel and ATF on March 27 as tensions in West Asia intensified. The rates have since been reviewed and revised every fortnight. A similar levy on petrol exports was introduced from May 16.

The windfall tax mechanism was brought in as global crude oil and petroleum product prices rose amid the West Asia conflict. The government sought to prevent exporters from benefiting excessively from international price differences while ensuring adequate availability of fuel in the domestic market.

By imposing higher levies on exports, the government aimed to make overseas sales less attractive when international prices were significantly higher than domestic prices.

The latest reduction indicates a change in the level of the export levy, while the government continues to retain the mechanism for periodic review. The fortnightly revisions allow it to respond to movements in global oil prices and changing market conditions.

For consumers in India, the immediate significance is limited because domestic petrol and diesel duty rates remain unchanged under the latest notification.