Govt Intensifies Windfall Tax: Export Duties Hike on Diesel and ATF as India Prioritizes Domestic Fuel Supply
The government has increased export duties on diesel and aviation turbine fuel (ATF), effective June 16, aiming to curb the outbound shipment of refined petroleum products. This move reflects a continued governmental focus on ensuring the domestic availability of crucial energy resources amid global market volatility.Windfall Tax Hike on Diesel and ATF
The new regulations stipulate an increase in the export duty on diesel, which is now set at Rs 14 per litre, up from the previous rate of Rs 13.5 per litre. Simultaneously, the export duty on ATF has been raised to Rs 12.5 per litre, a rise from its earlier level of Rs 9.5 per litre.In contrast, no change has been made to the existing excise duty rates for both petrol and diesel cleared for domestic consumption. The government confirmed that the rate of export duty on petrol remains unchanged at Rs 1.5 per litre.
Curbing Fuel Exports: Government's Rationale
The revision in fuel exports duties is a measure designed to disincentivize the export of refined fuels, directly addressing concerns over domestic supply stability. This action comes amidst international crises and global energy price fluctuations that make exporting highly profitable for private refiners.Government sources indicated that the hike was not primarily aimed at boosting state revenue. Instead, they stated it is "more about not allowing exporters to take undue advantage due to price differences." The steep revision underscores the government's sustained effort to regulate outbound shipments.
Periodic Review of Fuel Export Duties
The duty rates are subject to periodic review and adjustment, with decisions being made on a fortnightly basis. The last such rate revision was implemented effective June 1, 2026.These duties are meticulously prescribed based on the average international prices observed for crude oil, petrol, diesel, and ATF during the period since the previous review. The imposition of these export duties ensures that local consumption remains prioritized over lucrative overseas markets.
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