Amidst the ongoing fluctuations in the global oil market and softening crude oil prices, the Central Government has taken a big and important decision for the country’s oil companies. Issuing a new official notification on Tuesday, the government has drastically reduced the windfall tax on the export of diesel and aviation fuel (ATF). However, on the other hand, the duty on export of petrol has been increased to ensure adequate availability of fuel within the country. According to the Finance Ministry, these new tax rates will become effective from July 1, 2026.
According to the notification issued by the Finance Ministry, in this fortnightly review, the following changes have been made in the structure of Special Additional Excise Duty (SAED):
- Diesel Export: The tax on export of diesel has been reduced from ₹14 per liter to ₹8.5 per litre.
- Aerofuel: The duty on export of ATF has been reduced from ₹12.5 per liter to ₹7.5 per litre.
- Petrol Export: The duty on export of petrol has been directly increased from ₹1.5 per liter to ₹4 per litre.
Why was this decision taken?
Amidst the ongoing geopolitical tension and crisis in West Asia, the government has taken this step to maintain adequate availability of petrol and diesel in the domestic market. In fact, when global crude oil prices increase significantly, oil exporting companies start earning unfair profits by exporting oil instead of selling it in the domestic market. This decision of the government will discourage companies from exporting excessively so that there is no shortage of oil within the country. Along with this, the government has clarified that there has been no change in the existing duty rates on petrol and diesel for domestic consumption, which means the relief for the general public remains intact.
These neighboring countries got special exemption from tax
The government has given great relief to India’s friendly countries under this policy. When this export levy was imposed in March, exports made by public sector oil companies (PSUs) to Nepal, Bhutan, Bangladesh and Sri Lanka were kept out of this tax. Now the government has expanded the scope of this special exemption to include Mauritius and Maldives as well.
