Centre raises windfall tax on petrol exports to ₹2.50/litre, cuts diesel levy

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 They were withdrawn in 2024, then brought back in March 2026 after crude prices climbed again.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.