India raises export duty on diesel, ATF

New Delhi: India on Saturday sharply raised export duty on diesel and aviation turbine fuel (ATF), while continuing to exempt petrol shipments from the levy, signalling a calibrated move to shore up government revenue while managing domestic fuel availability.

According to notifications issued by the department of revenue, the effective export duty on diesel has been increased to ₹55.50 per litre from ₹21.50, marking a steep increase in the tax burden on outbound shipments. Duty on ATF has been raised to ₹42 per litre from ₹29.50. Exports for both fuels were duty-free until a fortnight ago.

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The duty hike, which is effective immediately, is intended to prevent exporters from exploiting price differentials, as global crude oil prices have surged since the onset of the Iran war, officials said.

The changes were effected by revising components such as special additional excise duty and road and infrastructure cess, which together determine the final duty on exports.

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The government on March S26 tweaked fuel duty structures amid the ongoing West Asia conflict, imposing an export duty of ₹21.50 a litre on diesel and ₹29.50 per litre on ATF. The duties were levied to increase domestic availability of the fuel amid the war in West Asia.

The revenue department said it will review the situation every fortnight.

According to Brokerage firm Macquarie, oil prices are likely to stay supported in the $85-90 a barrel range with a gradual move towards $110, as shipments through the Strait of Hormuz normalise. If disruptions extend through April, Brent could rise to $150, it said.