Centre Revises Fuel Export Duties From June 1, Keeps Domestic Petrol and Diesel Taxes Unchanged

New Delhi, May 2026 : The Central government has announced a fresh revision of export duties on petroleum products, lowering levies on petrol, diesel and aviation turbine fuel (ATF) for the fortnight beginning June 1, while maintaining existing excise duty rates on fuels sold in the domestic market.

According to an official notification, the export duty on petrol has been fixed at Rs 1.5 per litre, while diesel exports will attract a levy of Rs 13.5 per litre. The duty on aviation turbine fuel has been set at Rs 9.5 per litre. The revised rates are lower than those in force during the previous review period, reflecting changes in global energy prices.

The government clarified that the latest adjustment is based on the average international prices of crude oil and refined petroleum products, including petrol, diesel and ATF, observed since the last review. The export duty structure is reviewed periodically to align with prevailing market conditions and safeguard domestic fuel supplies.

While export taxes have been modified, consumers in the domestic market will see no change in fuel taxation, as excise duties on petrol and diesel remain unchanged.

The export levy mechanism was introduced on March 27, 2026, in response to heightened uncertainty in global energy markets caused by the West Asia crisis. The objective was to discourage excessive exports and ensure adequate availability of petroleum products within the country during a period of supply disruptions and volatile crude oil prices.

The previous revision, which came into effect on May 16, had imposed a special additional excise duty (SAED) of Rs 3 per litre on petrol exports while reducing the levy on diesel exports to Rs 16.5 per litre. At the same time, the government had reduced the road and infrastructure cess on petrol and diesel exports to zero, while leaving domestic fuel taxes untouched.

Diesel export duties have undergone several revisions since the policy was introduced. The levy was initially fixed at Rs 21.5 per litre on March 26 before being sharply increased to Rs 55.5 per litre on April 11 amid escalating global concerns over energy supplies. It was subsequently reduced to Rs 23 per litre on April 30 and then to Rs 16.5 per litre on May 16. The latest revision further lowers the duty to Rs 13.5 per litre.

Aviation turbine fuel has witnessed a similar trajectory. The export duty on ATF was initially set at Rs 29.5 per litre before being raised to Rs 42 per litre. It was later reduced to Rs 33 per litre and subsequently brought down further. The latest notification lowers the levy to Rs 9.5 per litre.

The windfall tax framework was introduced as a temporary measure to balance domestic fuel requirements with export opportunities during a period of global market instability. The latest reduction in export duties indicates easing pressure in international energy markets while allowing Indian refiners greater flexibility in overseas sales.

Team Maverick.