India has abolished the special additional excise duty on petrol exports while raising the levy on diesel exports to Rs 11.50 per litre and increasing the aviation turbine fuel export duty to Rs 11 per litre, according to Finance Ministry notifications issued on Saturday.
The revised rates remove the Rs 2.50-per-litre duty previously imposed on petrol exports. The levy on diesel exports has risen by Rs 3 per litre from Rs 8.50, while the duty on aviation turbine fuel, or ATF, has increased by 50 paise per litre from Rs 10.50.
The changes come as India continues to manage disruption in international energy markets linked to the war in West Asia. The conflict has unsettled crude supplies, increased shipping risks and kept global oil prices higher, according to the report. These conditions have also affected the cost and logistics of importing crude for India’s refineries.
The export levies were introduced in late March after the conflict pushed up international crude prices and improved the returns available to refiners selling petroleum products overseas. The government had stated that the duties were intended to discourage refiners from prioritising foreign markets over domestic buyers when international prices offered stronger realisations.
Before the conflict began, around 45% of India’s crude imports passed through the Strait of Hormuz, a major shipping route connecting the Persian Gulf with global markets. Disruption to commercial shipping through the strait forced India to diversify its sourcing, adding pressure to an energy system that depends substantially on imported crude.
The latest notification therefore changes the incentive structure for different petroleum products rather than applying one uniform export policy. Petrol exports will no longer attract the special additional excise duty, while diesel exports face a substantially higher levy. ATF exports have also been subjected to a marginally higher duty.
The government has simultaneously sought to shield domestic consumers from the immediate effects of the international price shock by keeping retail petrol and diesel prices stable, according to the report. Export duties are being used as one instrument to influence how much fuel refiners send abroad while domestic supply and consumer prices remain a policy concern.
The revision also comes against a backdrop in which India’s fuel export earnings have risen even as export volumes have declined. Higher oil costs and a weaker rupee have contributed to increased export realisations, with India earning nearly 50% more from fuel exports during April-September, according to the report.
For cities, the policy matters through the wider energy system that supports mobility, aviation, logistics and industrial activity. The notification does not announce a change in domestic petrol or diesel retail prices. Its immediate effect is on the economics of exporting refined fuels and on the balance between overseas sales and domestic availability.
The revised duties will remain part of the government’s response as it monitors international crude prices, shipping risks and the continuing disruption to energy supplies caused by geopolitical events.
