The Central Government has implemented significant changes to windfall gains tax on petroleum product exports, with petrol export duty reintroduced at ₹1.5 per litre and diesel export duty maintained at ₹24 per litre. According to the Finance Ministry, these new rates will remain in effect for the next fortnight starting September 1, 2026. The aviation turbine fuel (ATF) export duty has been reduced to ₹19 per litre, providing some relief for this sector. The special additional excise duty (SAED) on diesel now stands at ₹24 per litre, while SAED on ATF has been set at ₹19 per litre, compared to ₹19.5 per litre previously. As per Goodreturns, these revised rates apply only when petroleum products are exported from India, with petrol and diesel sold within the country remaining exempt from these changes.
Despite the windfall gains tax revisions, there has been no change in the existing duty rates on petrol and diesel cleared for domestic consumption. As reported by the Finance Ministry and confirmed by Business Standard, the latest revision does not directly alter the existing domestic fuel tax structure. This means domestic fuel prices will remain unchanged for consumers, with the tax burden continuing to be levied on domestic consumption rather than exported products. According to Goodreturns, petrol and diesel sold within the country are not covered by these changes, and the existing excise duty structure for domestic fuel sales remains unchanged. The government emphasized that there is no change in the existing excise duty rates on petrol and diesel cleared for domestic consumption, with the revised rates applying only to exports.
The revision in windfall gains tax on petrol and diesel exports is expected to have a positive impact on domestic fuel prices by reducing the tax burden on domestic consumption. According to government reports, this change will help maintain stable domestic fuel pricing while adjusting the tax structure for exported products. The reduction in ATF export duty may also provide some relief to the aviation sector, which relies heavily on jet fuel imports. The government's fiscal move aims to curb fuel exports amid West Asia tensions and ensure domestic supply, with the windfall tax originally levied to increase domestic availability of fuel amid the war in West Asia and aimed at preventing exporters from taking undue advantage due to price differences as global crude oil prices had increased since the war began. As per Business Standard, these periodic revisions allow authorities to respond to changing conditions in international oil and fuel markets.
The export duty revisions follow a fortnightly review mechanism based on average international prices of crude oil, petrol, diesel and ATF during the period since the previous review. According to Business Standard, the levies on exports of petrol, diesel and ATF were introduced from March 27, 2026, as part of measures to ensure domestic availability of petroleum products by discouraging exports amid the West Asia crisis. The previous revision took effect on August 15, 2026, when the government reduced the export duty on petrol to nil, set the levy on diesel at ₹24 per litre and fixed the duty on ATF at ₹19.5 per litre. The latest revision reverses the relief provided to petrol exporters in the previous fortnight and raises the levy on diesel exports by ₹1 per litre, while providing a 50-paise-per-litre reduction for ATF exports. This systematic approach ensures that export duties remain responsive to global oil market volatility and domestic fuel availability requirements.
The revised export levies could influence the earnings of Indian refiners that sell petroleum products in overseas markets. A higher duty means a portion of the revenue generated from exports goes towards taxes, which can affect the profitability of international fuel sales. According to Goodreturns, the revised export levies could influence the earnings of Indian refiners that sell petroleum products in overseas markets, as a higher duty means a portion of the revenue generated from exports goes towards taxes, which can affect the profitability of international fuel sales. The government's windfall taxes provide a mechanism to collect part of the additional gains earned by exporters during periods of favourable global energy prices. As per Business Standard, India's refiners remain significant exporters of petroleum products, with the government using export levies as a policy tool to balance overseas sales with domestic availability amid volatility in global oil markets.
