India raises export tax on petrol and diesel from 1 September 2026
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Where it stands
India taxes exports of petrol, diesel and aviation turbine fuel (ATF). The Finance Ministry revises the tax every fortnight. The latest revision took effect on 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. ATF exports pay Rs 19 per litre, down from Rs 19.5. Excise duty on petrol and diesel sold inside India did not change. The government imposed the export duty on diesel and ATF on 27 March 2026. Petrol exports came under the duty on 16 May 2026. The government says the duty keeps fuel available in India during the West Asia war. The duty also takes away part of the extra export profit from high world prices.
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Background
A windfall tax is a tax on sudden extra profit. India's windfall tax is an extra excise duty on fuel exports. India imported 88.7 per cent of its crude oil in 2025-26. Reliance Industries and Nayara Energy are India's big private refiners. Reliance runs the Jamnagar refinery complex in Gujarat. Nayara runs the Vadinar refinery in Gujarat. In 2022 the consultant FGE put the two refiners at 80 to 85 per cent of petrol and diesel exports. World fuel prices jumped after the war began on 28 February 2026. Exporting fuel then earned more than selling fuel in India. The export duty takes away part of that gain.
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.
Why it matters for UPSC
The windfall tax comes under GS Paper 3, Indian economy and energy security. Keep three points straight. The 2026 levy is an excise duty on exports, not a customs duty. The 2026 levy does not touch crude oil produced in India. The 2022 levy did tax domestic crude oil. The Finance Ministry changes the rate by notification under the Central Excise Act. Parliament does not vote on each change. For Prelims, know the full form of SAED and the three fuels covered.
Key terms
Sources (12)
- Akashvani News · official · Central Government announces duty cut on fuel, export taxes to ensure domestic supply03:12
- Business Standard · Govt abolishes windfall tax on crude oil, ATF, petrol, and diesel exports03:33
- Press Information Bureau · official · Government Slashes Excise Duty on Petrol and Diesel to Shield Consumers and OMCs from Global Oil Shock03:40
- Petroleum Planning and Analysis Cell · official · Excise duty on export of petrol, diesel and ATF and SAED on domestic crude oil production (rate table)03:39
- Deccan Herald · Govt imposes windfall tax on petrol exports; cuts levy on diesel, ATF (PTI)03:20
- Business Standard · Govt hikes windfall tax on petrol, cuts levy on diesel and ATF exports03:22
- Business Standard · Govt raises windfall tax on petrol, diesel, ATF exports from August03:22
- Forbes India · India Raises Windfall Tax on Fuel Exports; Diesel Duty Sees Sharpest Hike03:18
- ThePrint · Govt cuts windfall gains tax on petrol, diesel, ATF exports (PTI)03:16
- Business Standard · Govt cuts windfall tax on diesel, petrol and ATF exports, effective today04:40
- Business Standard · Govt hikes windfall gains tax on petrol, diesel exports; cuts levy on ATF (PTI)03:05
- Deccan Chronicle · Govt Hikes Windfall Tax On Petrol, Diesel Exports, Cuts Levy On ATF (PTI)04:10