Petrol Export Levy Scrapped, Diesel and ATF Duties Hike
The Ministry of Finance has removed the export levy on petrol while increasing duties on high-speed diesel and aviation turbine fuel.
In a significant shift in its petroleum export policy, the Central Government has scrapped the special additional excise duty (SAED) on petrol exports. However, this relief for petrol is offset by an increase in levies on high-speed diesel and aviation turbine fuel (ATF), as per the latest notifications from the Ministry of Finance.
The New Duty Structure
The revised rates, which became effective on October 31 following their publication in the Official Gazette, bring about the following changes in the export levy regime:
- Petrol: The SAED has been reduced to nil, completely removing the previous levy of Rs 2.5 per litre.
- High-Speed Diesel: The levy has been hiked to Rs 11.5 per litre, up from the previous rate of Rs 8.5 per litre.
- Aviation Turbine Fuel (ATF): According to Notification No. 56/2026-Central Excise, the duty has been increased to Rs 11 per litre from Rs 10.5 per litre.
Why Were These Levies Introduced?
The journey of these export duties began on March 27, 2026. The government introduced these levies on petrol, diesel, and ATF as a strategic response to the West Asia crisis. During that period, international energy prices were volatile and supply uncertainties were high.
The primary objective behind these duties was to discourage the export of petroleum products, thereby ensuring that domestic availability remained stable and sufficient for Indian consumers despite the global turmoil.
A Dynamic Pricing Mechanism
The government has not kept these rates static. To stay aligned with the global market, the Ministry of Finance has been conducting reviews every fortnight. These reviews take into account the average international prices of crude oil, petrol, diesel, and ATF since the last revision.
Because of this frequent monitoring, the rates have undergone several changes. Just before this latest update, the revision effective from October 16 had set the duties at Rs 2.5 per litre for petrol, Rs 8.5 per litre for diesel, and Rs 10.5 per litre for ATF.
The latest notifications, issued by the Department of Revenue under the Ministry of Finance, signal a recalibration of the government's strategy regarding which fuels need stricter export controls to protect the domestic market.