Diesel and aviation turbine fuel (ATF) are now subject to a higher windfall tax from the central government, whereas petrol exports are subject to a lower duty, as a result of changes to the Special Additional Excise Duty (SAED) on petroleum exports. There was a notice from the Ministry of Finance that the new rates would be effective as of July 16, 2026.
Diesel export duties have been hiked from Rs 8.5/litre to Rs 15.5/litre under the most recent adjustment, while ATF export duties have been raised from Rs 7.5/litre to Rs 14.5/litre. Petrol exporters have received some respite as the export duty has been reduced from Rs 4 per litre to Rs 2.5 per litre.
A dramatic increase in the price of crude oil on the global market has greatly increased refining margins, prompting the decision. Uncertainty in global energy markets has contributed to a spike in oil prices, which experts attribute to heightened geopolitical tensions between Iran and the US.
The government took a new tack earlier this month, increasing tariffs on petrol exports while lowering them on diesel and ATF exports. Government policy is to modify windfall taxes in response to shifting global market conditions and efforts to improve profitability, and this most recent change reflects that.
The government is able to seize a share of the exceptional gains made by refiners during periods of sharply rising worldwide oil prices through the windfall tax mechanism. On a regular basis, these tariffs are assessed to make sure they continue to be in line with the economics of exports, domestic energy interests, and crude oil prices across the world.
Government revenue from fuel exports is likely to rise with the latest adjustments, which also make sure that taxes adapt to changing trends in the global oil market. India is able to better manage its energy and budget objectives thanks to the ongoing assessment of these taxes.
Image: ET
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