India Eliminates Petrol Export Duty, Increases Diesel Tax
The Indian government has abolished the Rs 2.5 per litre export duty on petrol while raising the diesel levy significantly.
Petrol export duty removed; diesel tax increased to Rs 11.5 per litre.
Changes effective from October 31, following official Gazette publication.
Export duties were first introduced in March 2026 amid rising energy prices.
In a significant policy shift, the Indian government has abolished the Rs 2.5 per litre special additional excise duty (SAED) on petrol exports. Concurrently, the levy on high-speed diesel has been increased from Rs 8.5 to Rs 11.5 per litre, and the duty on aviation turbine fuel (ATF) has been raised from Rs 10.5 to Rs 11 per litre. These changes were officially announced by the Ministry of Finance through notifications issued on Saturday, with all revised rates coming into effect on October 31.
The introduction of export duties on petrol, diesel, and ATF was first implemented on March 27, 2026, in response to the West Asia crisis, which raised concerns about the availability of petroleum products in the domestic market. The government aimed to discourage exports to ensure sufficient supply within India, particularly during a period of rising international energy prices and supply uncertainties.
The Department of Revenue has been adjusting these duties every fortnight based on average international prices of crude oil and petroleum products. The latest adjustments reflect ongoing fluctuations in global energy markets, with the previous rates set at Rs 2.5 per litre for petrol, Rs 8.5 for high-speed diesel, and Rs 10.5 for ATF following a review on October 16.
These changes in export duties are expected to have significant implications for the domestic fuel market. With the removal of the petrol export duty, it may lead to increased competitiveness for Indian petrol in international markets. Conversely, the hike in diesel and ATF duties could impact domestic prices, potentially leading to higher costs for consumers and businesses reliant on these fuels.
Looking ahead, the government is likely to continue monitoring international energy prices closely, adjusting duties as necessary to balance domestic supply and demand. The next review of these duties is anticipated in the coming weeks, as the government remains vigilant about fluctuations in global energy markets and their impact on the Indian economy.
