India cuts windfall tax on diesel, ATF exports; petrol duty set at zero

The government has cut the windfall tax on diesel and aviation turbine fuel (ATF) exports and removed the export duty on petrol, with the revised rates taking effect from August 15.The total levy on diesel exports has been reduced to ₹24 per litre from ₹25.5 per litre, while the levy on ATF exports has been cut to ₹19.5 per litre from ₹22 per litre.The export duty on petrol has been reduced to nil from ₹3.5 per litre, according to notifications issued by the Finance Ministry on August 14.The latest move partly reverses the increase announced earlier this month. On August 3, the government had raised the petrol export duty to ₹3.5 per litre from ₹2.5 per litre, while the total levy on diesel was increased to ₹25.5 per litre from ₹15.5 per litre. The ATF levy was raised to ₹22 per litre from ₹14.5 per litre.Fortnightly reviewThe Centre reviews export levies on petroleum products every fortnight, with the rates linked to movements in international crude oil and petroleum product prices.The latest changes come as global oil prices remain volatile, with developments in the West Asia conflict continuing to influence crude and refined fuel markets. The government’s fortnightly revisions are aimed at adjusting the levies in line with global market conditions.The government had raised the export levies sharply at the start of August. The diesel levy, in particular, increased by ₹10 per litre in that revision, while the ATF levy rose by ₹7.5 per litre. Petrol saw a ₹1-per-litre increase.The latest revision brings some relief to refiners and exporters compared with the rates that had been in force since August 3, although the diesel and ATF levies remain above their levels before that increase.Windfall tax regime returns amid oil price volatilityIndia had first introduced a windfall tax regime in July 2022 after a sharp rise in global crude oil prices. The framework covered domestically produced crude oil as well as exports of petrol, diesel and ATF. The government withdrew the earlier regime in December 2024.The export levy regime was reintroduced in March 2026 amid another surge in global oil prices linked to the conflict in West Asia. The government introduced export levies on petrol, diesel and ATF from that date to discourage exports and help ensure domestic availability of petroleum products. Petrol initially carried a nil levy but was brought under a positive export duty from May.Since then, the rates have been revised several times as global oil prices and refined-product markets have changed.The rates were revised on July 1 and again on July 16 before the August 3 increase. The latest notification marks the second revision this month.Will the latest export duty changes affect petrol and diesel prices?The revised duties are applicable to petroleum products exported from India, rather than fuel sold in the domestic market. The notification does not change the excise duty on petrol or diesel for domestic consumers, so the latest revision by itself should not result in a change in pump prices.The immediate impact will instead be on refiners and exporters, whose tax liability on overseas shipments will change under the revised rates. The government can review these levies every fortnight and change them depending on prevailing market conditions.First Published: Aug 15, 2026 11:09 AM IST

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