New Delhi: The government has once again raised the windfall tax on exports of petrol, diesel and aviation turbine fuel (ATF), tightening its grip on fuel exports as geopolitical tensions in West Asia continue to keep global crude oil markets volatile.
According to a Finance Ministry notification issued on Monday, the revised Special Additional Excise Duty (SAED) came into effect from August 3. The export duty on diesel has been increased to Rs 25.5 per litre from Rs 15.5 per litre, while the levy on ATF has been raised to Rs 22 per litre from Rs 14.5 per litre. The duty on petrol exports has also been increased to Rs 3.5 per litre from Rs 2.5 per litre.
There is, however, no change in duties on petrol and diesel meant for domestic consumption.
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The latest increase marks another fortnightly revision under the government's dynamic windfall tax regime, introduced in response to the renewed surge in crude oil prices following the escalation of the conflict in West Asia.
Export duties on diesel and ATF were first imposed on March 27 to discourage refiners from diverting supplies to overseas markets at the expense of domestic availability. The levy was subsequently extended to petrol exports from May 16. Since then, the government has been reviewing and revising the tax every two weeks, depending on global price movements and export economics.
The policy aims to strike a balance between allowing refiners to benefit from strong international demand and ensuring that Indian consumers are insulated from supply disruptions and excessive price volatility. By reducing the profitability of exports during periods of elevated global prices, the government seeks to prioritise domestic fuel availability.
The repeated revisions, however, also underscore the uncertainty facing India's oil sector. Refiners have had to contend with frequent changes in export taxation, making it difficult to plan export volumes and margins. While the mechanism provides the government with flexibility to respond to geopolitical developments, industry executives have previously argued that frequent policy changes can affect business predictability, particularly for export-oriented refiners.
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India, one of Asia's largest fuel exporters, has emerged as a key supplier of refined petroleum products to several regions. Any change in export duties has a direct bearing on the profitability of private refiners with significant overseas sales, while state-owned refiners are generally more focused on meeting domestic fuel demand.
With tensions in West Asia showing little sign of easing, analysts expect the government to continue reviewing the windfall tax every fortnight, with future revisions likely to remain linked to movements in international crude oil prices and refining margins.
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