The Indian government has implemented significant reductions in windfall taxes on petroleum product exports, with revised rates taking effect from Saturday, August 15. According to the latest government order reported by Reuters, the duty on diesel exports has been reduced to ₹24 per litre from ₹25.5 per litre, while the export duty on petrol has been completely removed, falling to zero from ₹3.5 per litre. The levy on aviation turbine fuel exports has been cut to ₹19.5 per litre from ₹22 per litre. As per the Finance Ministry's August 14 notification, the Special Additional Excise Duty (SAED) and Road and Infrastructure Cess (RIC) on petrol exports have been reduced to nil. These changes represent a substantial reduction in export taxes for fuel exporters, despite rising global crude oil prices. The government has confirmed that these cuts are not expected to affect domestic fuel prices in India, as domestic excise duty rates on petrol and diesel for local consumption remain unchanged. The Finance Ministry has previously stated that changes to these export levies do not alter the excise duty rates on petrol and diesel cleared for domestic consumption.
The latest reductions follow a sharp increase in fuel export taxes earlier this month. As reported by The Economic Times, on August 3, the government raised the petrol export duty to ₹3.5 per litre from ₹2.5 per litre. The total duty on diesel exports was raised to ₹25.5 per litre from ₹15.5 per litre, while the levy on aviation fuel increased to ₹22 per litre from ₹14.5 per litre. According to Reuters, the government had imposed export duties on diesel and ATF in March amid escalating tensions in West Asia, and began taxing petrol exports from May 16. The levies were aimed at ensuring adequate domestic supplies and preventing exporters from taking advantage of higher international prices during the regional conflict. The current export-duty regime was introduced on March 27, 2026, when the government imposed a levy of ₹21.5 per litre on diesel exports and ₹29.5 per litre on ATF exports, while petrol exports carried no duty at the time. As per the Finance Ministry's Department of Revenue, these levies were introduced in March 2026 to ensure domestic availability of petrol, diesel and ATF by discouraging exports amid the West Asia crisis.
Despite the tax reductions, domestic fuel prices remained unchanged across major Indian cities on August 15, 2026, as reported by NDTV Profit. Brent crude futures closed at $88.52 per barrel, up $1.45 or 1.67% from $87.07 per barrel on August 13, while WTI crude futures ended at $82.40 per barrel, rising $1.15 or 1.42% from $81.25 per barrel in the previous session. The gains came as oil markets remained sensitive to geopolitical developments and potential risks to global supplies. However, domestic oil marketing companies maintained current pricing despite the surge in international crude prices.
As of August 15, 2026, petrol prices across major Indian cities remained unchanged despite the global crude oil price surge. According to NDTV Profit, petrol prices ranged from ₹102.12 per litre in Delhi to ₹115.43 per litre in Hyderabad, while diesel prices varied from ₹95.20 per litre in Delhi to ₹103.58 per litre in Hyderabad. The price stability reflects the government's decision to maintain domestic fuel affordability even as export tax policies are adjusted for international markets.
The government continues its fortnightly review of export levies on petroleum products based on international crude oil and fuel prices. According to Reuters, this latest reduction is part of the government's regular adjustment mechanism and not a permanent change in the tax structure. The windfall taxes were first introduced in July 2022 to capture extraordinary gains from high crude oil prices globally, were subsequently scrapped in 2024, but were reintroduced in March 2026 after crude prices surged during the US-Israeli war on Iran. The Finance Ministry has stated that the rates are determined using the average international prices of crude oil, petrol, diesel and ATF since the previous review, with duties imposed through SAED, RIC or a combination of the two, depending on the product and rates notified for each review period. The government has stated that the export duties do not apply to petrol and diesel sold for domestic consumption, demonstrating its responsive approach to international market conditions and crude oil price movements.
