The Indian government has reduced the windfall tax on exports of petrol, diesel and aviation turbine fuel (ATF)lowering the tax burden on companies exporting refined petroleum products.
The revised rates came into effect on September 16, 2026following the government’s regular fortnightly review of export levies.
Petrol Export Duty Cut to ₹0.50
The export levy on petrol has been reduced to ₹0.50 per litrefrom ₹1.50 per litre previously.
This represents a ₹1 per litre reduction and brings the levy significantly below the rate imposed earlier in September.
The duty consists of Special Additional Excise Duty (SAED), while the Road and Infrastructure Cess component remains nil.
Diesel Levy Reduced by ₹5
The government has also reduced the total export levy on diesel from ₹25 to ₹20 per litre.
The previous ₹25 levy consisted of ₹24 per litre in SAED and ₹1 per litre as Road and Infrastructure Cess. Under the latest notification, SAED has been reduced to ₹20 per litre and the RIC component has been removed.
This means diesel exporters will see their overall tax burden fall by ₹5 per litre.
ATF Tax Falls to ₹15
The windfall tax on aviation turbine fuel has been reduced from ₹19 to ₹15 per litre.
The latest cut reduces the export levy by ₹4 per litre and is applicable to ATF exported from India during the current fortnight.
Why Is the Government Changing the Rates?
India reviews export levies on petroleum products every two weeks, taking into account international crude oil prices, petroleum product prices and refinery margins.
The government originally introduced these export levies on March 27, 2026, amid the West Asia crisis. The objective was to discourage excessive exports and help maintain adequate supplies in the domestic market.
The rates have subsequently been adjusted several times as international market conditions changed.
No Change in Domestic Fuel Taxes
The latest decision applies specifically to exports of petroleum products.
There has been no corresponding change in the existing excise duty rates on petrol and diesel sold in the domestic market.
Therefore, the reduction in export levies does not by itself mean that petrol or diesel prices at Indian fuel stations will fall.
Summary
The government has reduced windfall taxes on petroleum exports from September 16. The petrol levy has fallen to ₹0.50 per litrediesel to ₹20 per litre and ATF to ₹15 per litre. The changes apply to exports, while domestic petrol and diesel excise duties remain unchanged.