Media365
India has raised windfall taxes on exports of diesel and aviation turbine fuel (ATF) by Rs 7 per litre each, while cutting the levy on petrol exports, as global crude oil prices surged following an escalation in the US-Iran conflict.
According to a government notification, the export duty on diesel has been increased to Rs 15.5 per litre from Rs 8.5 per litre. The levy on aviation turbine fuel exports has been raised to Rs 14.5 per litre from Rs 7.5 per litre.
At the same time, the government reduced the export duty on petrol to Rs 2.5 per litre from Rs 4 per litre. The revised rates will come into effect from July 16.
The changes are part of the government’s fortnightly review of windfall taxes, which are linked to international fuel prices and refining margins.
Crude prices spike amid US-Iran tensions
The latest revision comes as crude oil prices climbed sharply after tensions between the United States and Iran intensified this week. Brent crude briefly rose to around $84.7 a barrel before easing slightly, after US President Donald Trump reimposed a naval blockade on Iranian ports and Iran launched retaliatory strikes on US infrastructure in the region.
The developments have heightened concerns over oil supplies moving through the Strait of Hormuz, a key global shipping route that handles a significant share of the world’s crude flows.
Higher diesel refining margins, driven by supply disruptions including lower Russian exports and tighter fuel markets, have also supported the government’s decision to raise export duties on diesel and jet fuel.
How the levy works
India periodically adjusts windfall taxes on fuel exports to capture a portion of refiners’ extraordinary profits when international prices and export margins rise sharply. The levy is reviewed every fortnight.
The move comes weeks after the Centre had temporarily restricted bulk purchases of petrol and diesel from retail fuel stations, citing concerns over equitable availability and the risk of hoarding amid disruptions to global petroleum supply chains. Those curbs were lifted with effect from July 1.
The higher export duties are expected to moderate refiners’ gains from overseas fuel sales while helping the government collect additional revenue during a period of elevated crude oil prices.
