India Hikes Diesel Export Duty, Adds Petrol Tax

The Indian government has revised its export duties on various petroleum products, with new rates taking effect on September 1, 2026. This adjustment includes an increased levy on diesel and a new duty introduced for petrol exports.

Understanding the Revised Levies

The export duty on diesel has been raised to ₹25 per litre, marking an increase from the previous ₹24 per litre. This change reflects ongoing adjustments in the petroleum product market.

For petrol, a new export duty of ₹1.5 per litre has been imposed, where previously no such levy existed. This introduces a fresh fiscal measure for petrol exports.

Conversely, the duty on Aviation Turbine Fuel (ATF) has been reduced to ₹19 per litre, decreasing from its earlier rate of ₹19.5 per litre.

Policy Rationale and Review Process

These export levies were initially established on March 27, 2026, serving as a strategic measure to ensure sufficient domestic availability of petroleum products. The intent was to discourage exports, particularly in response to the West Asia crisis.

The government conducts a regular review and adjustment of these rates every fortnight. Revisions are based on the average international prices of crude oil, petrol, diesel, and ATF, with the last such assessment occurring on August 15.

Importantly, the existing excise duty rates for petrol and diesel intended for domestic consumption remain unchanged. This policy highlights India’s significant role as a major exporter of petroleum products and its ongoing efforts to balance domestic supply with international sales amid global oil market fluctuations.