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Centre raises windfall tax on petrol exports to ₹2.50/litre, cuts diesel levy
India raised the windfall tax on petrol exports to ₹2.50 per litre from ₹0.50, effective October 16. Diesel export duty was cut to ₹8.50 per litre from ₹16, while ATF stayed at ₹10.5. Retail fuel prices in major cities were steady.
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India raised the windfall tax on petrol exports on Friday, lifting the levy fivefold to ₹2.50 per litre for the fortnight starting October 16, while cutting the duty on diesel exports to ₹8.50 per litre from ₹16.
The change was notified by the Finance Ministry and took effect on October 16. The export duty on aviation turbine fuel (ATF) was left unchanged at ₹10.5 per litre.
The levies fall under the Special Additional Excise Duty (SAED) framework that the Centre uses to capture a share of extra profits when global energy prices rise. The rates are reviewed every two weeks, and the latest revision follows the previous reset that came into force on October 1.
For motorists, the government has said the export-duty move does not alter excise duty on petrol and diesel sold in the domestic market. Retail pump prices in major cities were steady on October 16.
Petrol export levy jumps
Under the new schedule, petrol exports face a much higher charge than in the previous fortnight. The duty was increased to ₹2.50 per litre from ₹0.50 per litre, a step that will raise the tax cost for refiners and traders shipping petrol overseas.
At the same time, diesel exports received relief. The combined SAED and road and infrastructure cess applicable to diesel exports was cut to ₹8.5 per litre from ₹16 per litre. In contrast to diesel, no road and infrastructure cess applies on exports of petrol, diesel and ATF under the current structure described in the latest notification.
The government did not spell out a reason for moving petrol and diesel duties in opposite directions in the latest order. The fortnightly review mechanism is designed to respond to shifts in international crude oil and refined-product prices since the last assessment window.
Windfall taxes on fuel exports were first introduced in July 2022 when global energy prices surged. They were withdrawn in 2024, then brought back in March 2026 after crude prices climbed again.
While the export levies directly affect overseas shipments, they can still matter to the domestic market through refinery economics and product flows. On Friday, however, retail fuel prices in major metros were unchanged.
In Delhi, petrol was priced at Rs. 102.12 per litre and diesel at Rs. 95.20. Hyderabad continued to post some of the highest rates among the cities tracked, with petrol at Rs. 115.69 per litre and diesel at Rs. 103.82.
Chennai’s petrol price was listed at Rs. 107.76 per litre. The update described prices as stable on October 16.
Petrol, also known as gasoline in North American English, is a transparent, flammable liquid derived from the fractional distillation of petroleum and later blended with additives. It is used mainly as fuel for spark-ignited internal combustion engines.
What happens next
The revised export duties will apply for the next fortnight, after which the government is expected to review them again under its regular two-week cycle.
The direction of the next move will depend on average international prices of crude oil and the refined products over the review period. For now, exporters of petrol face a higher tax outgo, diesel shippers see a lower levy. ATF exporters operate under an unchanged duty.
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