Crude oil rally prompts Centre to raise diesel, ATF export tax
The Centre has raised the windfall tax on exports of diesel and aviation turbine fuel (ATF), responding to a sharp rebound in global crude oil prices driven by escalating tensions in West Asia. The revised duties came into effect on July 16 following the government’s latest fortnightly review of the windfall tax regime.
Under the revised structure, the export duty on diesel has been increased to ₹15.5 per litre from ₹8.5 per litre, while the levy on ATF exports has been raised to ₹14.5 per litre from ₹7.5 per litre. At the same time, the government has reduced the export duty on petrol to ₹2.5 per litre from ₹4 per litre.
The move follows a rally in international crude oil prices, with Brent crude climbing above $85 a barrel amid concerns over supply disruptions linked to the ongoing US-Iran conflict and heightened instability around the Strait of Hormuz. Higher crude prices have boosted refining margins, prompting the government to recalibrate export duties.
India reviews windfall taxes every fortnight to ensure that domestic fuel availability is not affected when refiners earn higher profits from overseas sales. The levy is imposed as a Special Additional Excise Duty (SAED) and is adjusted in line with movements in global crude prices and refining margins.
The revised duties are expected to keep oil marketing and refining companies in focus, while domestic consumers are unlikely to see an immediate impact as the changes apply to fuel exports, not retail petrol or diesel sold within India. Retail fuel prices across major cities have remained unchanged despite the latest tax revision.
The government’s latest decision underscores its balancing act between safeguarding domestic fuel supplies, protecting consumers from global price volatility and ensuring that extraordinary profits from exports are appropriately taxed during periods of elevated crude prices.
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