Petrol export duty removed as diesel and jet-fuel levies rise
Where it stands
India has removed the special export levy on petrol while increasing it on diesel and aviation turbine fuel. The revised rates took effect on 31 October 2026. Petrol’s rate falls from ₹2.50 per litre to zero, diesel’s rises from ₹8.50 to ₹11.50, and jet fuel’s reaches ₹11. These are taxes on exports. They do not announce a matching change in the prices paid at Indian fuel stations. The domestic excise-duty schedule is separate from the export rates revised here. For an exporter, the change affects how much tax is due on the same quantity shipped abroad. A hypothetical taxable export of 1,000 litres of diesel now attracts ₹11,500 instead of ₹8,500. That is ₹3,000 more, assuming the shipment is not exempt. An equivalent petrol shipment no longer attracts the earlier ₹2,500 levy. The opposite movements also show why there is no single fuel-tax direction in this revision. Petrol exporters receive relief, while diesel and jet-fuel exporters face higher charges. The government reviews the rates against international fuel prices. The effect on each company still depends on what it exports and the other costs it faces.
Background
A refinery turns crude oil into products such as petrol, diesel and jet fuel. It can sell those products in India or send them abroad. When overseas sales become especially profitable, an export duty can take away part of that additional return. The duty works through the economics of a shipment. Holding its selling price and other costs constant, a higher tax leaves the exporter with less money. A lower tax leaves more. This can influence the choice between selling at home and exporting, although demand and other costs also matter. The government changes the rates periodically because international prices do not move uniformly across all fuels. Petrol, diesel and jet fuel have different markets. Their export levies can therefore move in different directions in the same revision. Before this revision, the schedule effective from 16 October charged ₹2.50 per litre on petrol exports. Diesel attracted ₹8.50 and jet fuel ₹10.50 per litre. Removing the petrol levy now lowers that exporter’s tax cost. Raising the other two rates increases the cost of those shipments. For households, the important distinction is between an export levy and taxes on domestic purchases. Removing an export levy does not require a retailer to cut the pump price by the same amount. The new notification changes one part of the fuel trade, not every component of the consumer’s bill.
How it developed
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July 2022 to March 2026How it started
India brought back the fuel export tax on 27 March 2026
India first taxed fuel exports on 1 July 2022. World oil prices had surged after the Ukraine war. The 2022 tax also covered crude oil produced in India. The government scrapped that tax on 2 December 2024. The United States and Israel struck Iran on 28 February 2026. Crude oil rose from about USD 70 to USD 122 a barrel within a month. On 27 March 2026 the government cut excise duty on petrol and diesel by Rs 10 per litre. The same day an export duty took effect on diesel and ATF. The rates were Rs 21.5 per litre on diesel and Rs 29.5 on ATF. The Finance Ministry has revised the rates every fortnight since.
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16 May 2026New fact
Petrol exports taxed for the first time from 16 May 2026
The Finance Ministry put a duty of Rs 3 per litre on petrol exports from 16 May 2026. Petrol exports had paid no duty since the war began. The ministry also cut the diesel duty to Rs 16.5 per litre from Rs 23. The ATF duty fell to Rs 16 per litre from Rs 33. The diesel and ATF rates had peaked on 11 April 2026 at Rs 55.5 and Rs 42 per litre. The road and infrastructure cess on petrol and diesel exports was set at nil.
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1 July 2026New fact
Diesel and ATF export duty cut from 1 July 2026
The government cut the diesel export duty to Rs 8.5 per litre from Rs 14 from 1 July 2026. The ATF duty fell to Rs 7.5 per litre from Rs 12.5. The petrol duty rose to Rs 4 per litre from Rs 1.5. World oil prices had fallen from peaks above USD 126 a barrel after shipping through the Strait of Hormuz resumed. Exports by public sector oil companies to Nepal, Bhutan, Bangladesh and Sri Lanka were exempt from the start. The exemption now covers Mauritius and the Maldives too.
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3 August 2026New fact
Export duty raised on all three fuels from 3 August 2026
The government raised the export duty on all three fuels from 3 August 2026. The petrol duty rose to Rs 3.5 per litre from Rs 2.5. The diesel duty rose to Rs 25.5 per litre from Rs 15.5. The ATF duty rose to Rs 22 per litre from Rs 14.5. The diesel figure included a road and infrastructure cess of Rs 1.5 per litre. The ministry sets each rate from the average world prices of crude oil and fuels since the last review.
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15 August 2026New fact
Petrol export duty back to zero from 15 August 2026
The government cut the export duty on all three fuels from 15 August 2026. The petrol duty fell to zero from Rs 3.5 per litre. The diesel duty fell to Rs 24 per litre from Rs 25.5. The ATF duty fell to Rs 19.5 per litre from Rs 22. Three notifications dated 14 August 2026 made these changes. The road and infrastructure cess on diesel exports went to nil.
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1 September 2026New fact
Petrol and diesel export duty raised from 1 September 2026
The Finance Ministry revised the export duty again from 1 September 2026. Petrol exports now pay Rs 1.5 per litre, up from zero. Diesel exports pay Rs 25 per litre, up from Rs 24. The diesel figure includes the road and infrastructure cess. ATF exports pay Rs 19 per litre, down from Rs 19.5. Excise duty on petrol and diesel sold inside India did not change.
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31 October 2026New fact
The new rates affect exporters differently across the three fuels
The Finance Ministry’s notifications set petrol’s export levy at zero and diesel’s at ₹11.50 per litre. Aviation turbine fuel rises from ₹10.50 to ₹11 per litre. The new schedule took effect on 31 October. For a taxable shipment, the diesel increase is ₹3 per litre and the jet-fuel increase is ₹0.50. Petrol’s reduction is ₹2.50 per litre. This changes the tax cost of exporting each product. It does not by itself establish a change in the domestic pump price.
Why it matters for UPSC
Explain how an export duty changes the return on a shipment and may influence domestic availability. Distinguish a per-litre tax from a tax on measured company profit. Compare successive rates and avoid treating export-tax changes as automatic changes in retail fuel prices.
Key terms
Sources (15)
- Akashvani News · official · Central Government announces duty cut on fuel, export taxes to ensure domestic supply2 Sep, 3:12 am
- Business Standard · Govt abolishes windfall tax on crude oil, ATF, petrol, and diesel exports2 Sep, 3:33 am
- Press Information Bureau · official · Government Slashes Excise Duty on Petrol and Diesel to Shield Consumers and OMCs from Global Oil Shock2 Sep, 3:40 am
- Petroleum Planning and Analysis Cell · official · Excise duty on export of petrol, diesel and ATF and SAED on domestic crude oil production (rate table)2 Sep, 3:39 am
- Deccan Herald · Govt imposes windfall tax on petrol exports; cuts levy on diesel, ATF (PTI)2 Sep, 3:20 am
- Business Standard · Govt hikes windfall tax on petrol, cuts levy on diesel and ATF exports2 Sep, 3:22 am
- Business Standard · Govt raises windfall tax on petrol, diesel, ATF exports from August2 Sep, 3:22 am
- Forbes India · India Raises Windfall Tax on Fuel Exports; Diesel Duty Sees Sharpest Hike2 Sep, 3:18 am
- ThePrint · Govt cuts windfall gains tax on petrol, diesel, ATF exports (PTI)2 Sep, 3:16 am
- Business Standard · Govt cuts windfall tax on diesel, petrol and ATF exports, effective today2 Sep, 4:40 am
- Business Standard · Govt hikes windfall gains tax on petrol, diesel exports; cuts levy on ATF (PTI)2 Sep, 3:05 am
- Deccan Chronicle · Govt Hikes Windfall Tax On Petrol, Diesel Exports, Cuts Levy On ATF (PTI)2 Sep, 4:10 am
- Gazette of India / Finance Ministry · official · Notifications 55 and 56 of 2026: fuel export duties1 Nov, 2:20 pm
- Petroleum Planning and Analysis Cell · official · Fuel export duty history through 16 October 20261 Nov, 2:20 pm
- Business Standard · Government raises diesel and ATF export duties; petrol exports exempt1 Nov, 2:20 pm