Government scraps export duty on petrol, raises levies on diesel and ATF

The government has scrapped the special additional excise duty on petrol exports while raising the levy on diesel exports by Rs 3 per litre and on aviation turbine fuel (ATF) exports by 50 paise per litre, according to notifications issued by the Finance Ministry on Saturday.

Under the revised rates, petrol exports will now attract no duty, down from Rs 2.50 per litre earlier. The diesel exports levy has been increased to Rs 11.50 per litre from Rs 8.50 per litre, while the duty on ATF exports has been raised to Rs 11 per litre from Rs 10.50 per litre.

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The export levies were introduced in late March as the conflict in the Middle East disrupted global energy supplies and pushed up international crude prices.

The government’s stated objective was to discourage refiners from prioritising overseas markets over domestic buyers at a time when global prices were offering stronger export realisations.

Before the conflict began, around 45% of India crude imports passed through the Strait of Hormuz, a major shipping route connecting the Persian Gulf with global markets. The disruption to commercial shipping through the strait forced India to diversify sourcing.

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The latest revision comes as India continues to navigate the fallout of the war in West Asia , which has unsettled crude supplies, raised shipping risks and kept global oil prices higher. While the Indian government has sought to protect domestic consumers from feeling the full impact of the shock by keeping retail petrol and diesel prices stable, it has also used export duties to influence how much fuel refiners send overseas.