The Centre has raised export taxes on diesel and aviation turbine fuel by ₹7 a litre each from July 16, tightening curbs on overseas sales as escalating US-Iran tensions and disruption risks around the Strait of Hormuz push global energy prices higher.
The Special Additional Excise Duty on diesel exports has been increased 82% to ₹15.50 a litre from ₹8.50, while the levy on ATF has jumped 93% to ₹14.50 from ₹7.50, according to a finance ministry notification. Petrol exporters received relief, with the duty cut 37.5% to ₹2.50 a litre from ₹4.
The revised rates, effective for the fortnight beginning July 16, mark the government’s latest attempt to retain more transport and aviation fuels in the domestic market while international prices and refining margins remain elevated.
The Centre first imposed export duties on diesel and ATF on March 27 after the West Asia conflict escalated and has reviewed the levies every fortnight. Petrol exports were brought under the windfall-tax framework from May 16.
The government clarified that duties on petrol and diesel cleared for domestic consumption remain unchanged, ensuring that the latest revision applies only to export consignments.
Guarding Domestic Supply
The sharp increase makes diesel and ATF exports substantially less attractive for refiners, strengthening the incentive to supply the domestic market. The move is intended to prevent exporters from benefiting disproportionately from the gap between domestic and international prices after the surge in global crude and product rates.
Calibrating Levies
The contrasting reduction in the petrol levy reflects a product-specific approach rather than a uniform restriction on fuel exports. While diesel and ATF face a ₹7-a-litre increase, the petrol duty has been lowered by ₹1.50.
By lifting the export burden on petrol while sharply increasing it on diesel and jet fuel, the Centre is differentiating between product-level supply conditions rather than imposing a blanket curb across the refined-fuel basket. The move will remain subject to fortnightly review.
The tax mechanism allows the government to recalibrate export incentives in line with global prices, refining margins and domestic supply requirements.
On Thursday, Brent crude futures were up 88 cents, or 1.04%, to $85.83 a barrel at 1237 GMT, while U.S. West Texas Intermediate futures were up 94 cents, or 1.18%, to $80.54 a barrel.
