The Indian government has raised the windfall tax on the export of petrol, diesel, and aviation turbine fuel (ATF), effective August 3, 2026. This move comes as global energy markets face continued volatility linked to geopolitical tensions in West Asia. Under the new order, the special additional excise duty on diesel exports has been increased to 25.5 rupees per litre, up from 15.5 rupees. Similarly, the tax on aviation turbine fuel has been raised to 22 rupees per litre from 14.5 rupees, while the levy on petrol exports has climbed to 3.5 rupees per litre from 2.5 rupees.
These taxes are part of a routine fortnightly assessment by the Finance Ministry, designed to capture a portion of the extraordinary profits earned by fuel exporters when global prices surge. By making exports less profitable, the government aims to discourage oil companies from selling fuel abroad, thereby ensuring that domestic supply remains stable and sufficient to meet local demand. The ministry clarified that there are no changes to the existing excise duty rates on petrol and diesel intended for domestic consumption.
India first introduced these windfall levies in July 2022 to address the market imbalances caused by the Russia-Ukraine conflict. Although the tax was briefly scrapped in late 2024, it was reintroduced in March 2026 following a sharp rise in global oil prices during the U.S.-Israeli conflict with Iran. The government continues to monitor international crude oil prices and refining margins to determine whether these levies should be adjusted, reduced, or removed in future reviews.