India Revises Windfall Tax on Petroleum Exports for Fortnight Starting August 3

The Centre has increased the windfall tax on exports of petrol, diesel and aviation turbine fuel (ATF) for the fortnight beginning August 3, raising export levies in a move aimed at safeguarding domestic fuel supplies amid continued geopolitical uncertainty in West Asia.

According to a notification issued by the Finance Ministry, the Special Additional Excise Duty (SAED) on diesel exports has been raised to ₹25.5 per litre from ₹15.5 per litre. The duty on ATF exports has been increased to ₹22 per litre, up from ₹14.5 per litre, while the levy on petrol exports has been revised to ₹3.5 per litre from ₹2.5 per litre. The revised rates came into effect on August 3.

The ministry clarified that there is no change in the existing excise duty on petrol and diesel meant for domestic consumption, indicating that the latest revision is targeted solely at exports.

The government first imposed the windfall tax on diesel and ATF exports on March 27, following heightened tensions in West Asia that triggered volatility in global crude oil prices. The levy was later extended to petrol exports from May 16, with rates reviewed every fortnight in line with international market conditions.

The latest increase reflects the government's continued effort to discourage excessive fuel exports during periods of elevated global prices while ensuring adequate domestic availability of key petroleum products. By narrowing the pricing advantage available in overseas markets, the policy seeks to prevent refiners from prioritising exports at the expense of local supply.

For the energy sector, the higher export duties could moderate export margins for refiners and fuel producers, particularly those with significant overseas sales. However, the measure is expected to support domestic fuel stability by maintaining adequate supplies and cushioning the local market from disruptions caused by geopolitical developments and fluctuations in international crude oil prices.