Centre Cuts Diesel Export Tax, Raises Levy on Petrol from October 16

The Central Government has revised windfall taxes on petroleum product exports, reducing the tax on diesel while increasing the levy on petrol. Effective October 16, the combined special additional excise duty and road and infrastructure cess on diesel exports has been cut from Rs. 16 to Rs. 8.50 per litre, providing potential relief to diesel exporters. Meanwhile, the levy on petrol exports has increased from Rs. 0.50 to Rs. 2.50 per litre. These revised rates will remain in force for 15 days, in line with the government’s practice of reviewing export taxes every fortnight. The tax on aviation turbine fuel (ATF) exports remains unchanged at Rs. 10.50 per litre.

The revisions come amid fluctuations in global crude oil prices and continuing geopolitical tensions in West Asia. The government introduced windfall taxes on diesel and ATF exports on March 27 and extended similar taxation to petrol exports from May 16, aiming to protect domestic fuel availability and moderate exceptional gains from exports when international prices rise. The latest changes apply to fuel exports, while taxes on petrol and diesel sold for domestic consumption remain unchanged. The impact on export volumes will depend on global market conditions and exporters’ decisions.