Center cuts windfall tax on diesel exports, hikes tax on petrol | Today’s news
The Center has cut a surprise tax on diesel exports while raising petrol export tax for a fortnight starting October 16, amid escalating tensions in West Asia and rising oil prices.
The combined rate of Special Additional Excise Duty (SAED) and Road and Infrastructure Tax on diesel exports has been reduced to ₹8.50 per liter from ₹16 per liter. SAED for gasoline exports was increased to ₹2.50 per liter from ₹0.50 in the last fortnight. The aviation turbine fuel (ATF) levy remains unchanged ₹10.50 per liter.
Amid escalating tensions in West Asia, the government imposed an export duty on diesel and ATF on March 27, revising the rates every fortnight. As of May 16, the tax was extended to gasoline exports.
The ministry also said there is no change in the existing duty rates on petrol and diesel approved for domestic consumption.
Home supply
The windfall tax was introduced to ensure domestic availability of petroleum products by discouraging exports during the West Asian War. It was also intended to prevent exporters from taking undue advantage of the price differential between domestic and international markets as global oil prices rose after the conflict broke out.
Although India is a net importer of oil, importing about $123 billion annually, it also exports about $45 billion worth of petroleum products such as gasoline, diesel and jet fuel.
Reliance Industries is India’s largest exporter of petroleum products, while state-owned oil marketing companies also cater to overseas markets. According to the Ministry of Petroleum, India is the seventh largest exporter of petroleum products in the world.
Refining capacity
With the fourth largest oil refining capacity in the world at over 258 million tonnes, India is also seeing record growth in domestic consumption of petroleum products.
In fiscal 2026, domestic consumption of petroleum products touched a high of 243 million tonnes, while exports stood at 61.43 million tonnes, according to data from the Petroleum Planning and Analysis Cell (PPAC).
Amid tensions in West Asia, oil prices have risen around 10% over the past two weeks. At around 7:50 a.m., the December Brent contract was trading at $105.50 a barrel on the Intercontinental Exchange, down 0.39% from the previous close.
