The government has lowered the windfall tax on exports of diesel and aviation turbine fuel (ATF), with the revised rates coming into effect from May 1, 2026. However, excise duties on petrol and diesel sold in the domestic market remain unchanged.
Under the latest revision, the export duty on diesel has been reduced to ₹23 per litre from ₹55.5 per litre, while the levy on ATF exports has been cut to ₹33 per litre from ₹42 per litre. In addition, the finance ministry announced that the road and infrastructure cess on diesel exports will be waived for the next fortnight starting May 1. The export duty on petrol continues to remain nil.
The move follows a series of adjustments in recent weeks. On March 26, the government had imposed export duties of ₹21.50 per litre on diesel and ₹29.5 per litre on ATF. These rates were later sharply increased on April 11 to ₹55.5 per litre for diesel and ₹42 per litre for ATF.
The windfall tax was introduced to ensure adequate domestic availability of petroleum products amid supply disruptions triggered by the ongoing conflict involving the United States, Israel and Iran. It also aims to prevent exporters from making excessive profits due to the widening gap between domestic and international fuel prices as global crude markets surged.
According to the finance ministry, the export duty framework is designed to discourage excessive overseas shipments during the West Asia crisis and safeguard domestic fuel supplies.
Global oil markets have remained volatile since tensions escalated in the region. Following US and Israeli strikes on Iran on February 28 and Tehran’s subsequent retaliation, crude prices have risen sharply—from around $73 per barrel to a four-year high of $126 per barrel.
Despite disruptions affecting oil flows through the Strait of Hormuz, India has managed to cushion the impact through diversified sourcing and the availability of large volumes of Russian crude already in transit.
