India Slashes Windfall Taxes on Diesel and Aviation Fuel, Raises Petrol Tax
Quick Look
- India has reduced windfall taxes on diesel and aviation fuel exports to Rs 8.5/litre and Rs 7.5/litre respectively, while increasing the petrol export duty to Rs 4/litre.
- These changes, effective July 1, aim to manage domestic supply amidst easing global oil prices and extend exemptions to more neighbouring countries.
AI-generated summary
India has lowered windfall taxes on exports of diesel and aviation turbine fuel as global oil prices ease, while raising the duty on petrol exports, according to a government order.
The duty on diesel exports has been cut to Rs 8.5 per litre from Rs 14, while the aviation turbine fuel duty has been set at Rs 7.5/litre, down from Rs 12.5.
The export duty on petrol has been increased to 4 rupees per litre from 1.5 rupees to ensure domestic supply.
The new rates will apply from July 1.
Oil prices have fallen sharply from peaks above $126 per barrel, as easing geopolitical tensions and restored shipping flows through the Strait of Hormuz have reduced fears of prolonged supply disruptions.
Economists and analysts forecast Brent crude will average $84.50 per barrel in 2026, against $90.44 projected last month.
At the time of imposition of the export levy, exemption was provided for exports of petrol, diesel and ATF made by public sector oil companies to Nepal, Bhutan, Bangladesh and Sri Lanka.
The exemption has now been extended also to exports made by public sector oil companies to Mauritius and Maldives.
