Petrol Export Duty Hiked, Diesel Levy Slashed by Centre
The Centre has raised the export duty on petrol and cut the levy on diesel to manage domestic supply amidst global market volatility.
In a strategic move to balance domestic fuel availability with global market fluctuations, the Central Government has announced a revision in the petrol export duty revision and diesel levies. Effective from October 16, the government has increased the duty on petrol exports while significantly lowering the tax burden on diesel exports for the upcoming fortnight.
The New Tax Breakdown
The latest adjustments primarily target the Special Additional Excise Duty (SAED). Here is how the rates have shifted:
- Petrol: The export duty has seen a sharp increase, rising from Rs 0.50 per litre to Rs 2.5 per litre.
- Diesel: In a major reduction, the levy on diesel exports has been slashed from Rs 16 per litre down to Rs 8.5 per litre.
- Aviation Turbine Fuel (ATF): The export duty for ATF remains unchanged at Rs 10.5 per litre, applied entirely as SAED.
Notably, the Road and Infrastructure Cess (RIC) on the exports of both petrol and diesel continues to be nil.
Why the Frequent Changes?
These levies were first introduced on March 27, 2026, as a safeguard to ensure that India has enough fuel for its own citizens. By imposing these duties, the government discourages companies from exporting fuel during times of crisis—such as the ongoing West Asia crisis—where higher international prices might otherwise tempt exporters to divert supplies away from the Indian market.
The Review Mechanism
The government does not keep these rates static. Instead, it conducts a rigorous review every fortnight. This process involves analyzing the average international prices of crude oil and refined petroleum products, including petrol, diesel, and ATF, since the last review date. The current changes, following the previous update on October 1, are a direct result of this periodic assessment of international energy volatility.
Will This Affect Local Fuel Prices?
For the average commuter and consumer within India, there is no cause for alarm regarding daily fuel costs. The government has clarified that there is no change in the existing excise duty rates for petrol and diesel cleared for domestic consumption. These revised rates apply strictly to the export of these petroleum products and do not impact the prices seen at local fuel stations.