India Hikes Windfall Tax on Fuel Exports from August 3

The Indian Centre has once again adjusted the windfall tax on fuel exports, implementing higher duties on petrol, diesel, and aviation turbine fuel (ATF). These revised rates are effective from August 3, 2026, and will remain in place for the next fortnight, signaling a responsive approach to market conditions.

This latest revision introduces a notable increase in the special additional excise duty (SAED) across all three key petroleum products. The government’s stated objective is multifaceted: to ensure sufficient domestic availability of these essential fuels and to curtail excessive profits that exporters might derive from significant global price disparities.

Revised Export Duty Structure

• Diesel exports: The SAED has been raised to Rs 25.5 per litre, an increase from the previous rate of Rs 15.5 per litre.
• ATF exports: The duty on aviation turbine fuel exports is now set at Rs 22 per litre, up from Rs 14.5 per litre.
• Petrol exports: The SAED applicable to petrol exports has been adjusted to Rs 3.5 per litre, increasing from Rs 2.5 per litre.

These upward adjustments are enacted amidst the backdrop of the ongoing Middle East crisis, which continues to exert pressure on international energy markets. The Centre’s measure is a strategic step to foster domestic market stability and safeguard against potential supply disruptions or inflationary pressures within India.

The decision aligns with broader governmental actions in the energy sector, notably following a recent reduction in commercial LPG prices. Furthermore, the Cabinet Committee on Security has actively discussed the extensive impact of global conflicts on India’s critical supply chains, providing a crucial context for these targeted modifications to the fuel export tax regime.