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India Adjusts Windfall Tax on Fuel Exports: Petrol Levy Rises, Diesel and ATF Taxes Cut

NEW DELHI, INDIA – June 30, 2026 – The Indian government has announced revisions to its windfall gains tax on fuel exports, effective from July 1, 2026. This adjustment sees an increase in the levy on petrol exports, while the taxes on diesel and Aviation Turbine Fuel (ATF) exports have been reduced ¹²³.

This move comes as part of the government's ongoing strategy to manage the energy market and revenue, with these changes implemented for the fortnight beginning July 1 ¹⁷. Domestic fuel excise rates remain unchanged ⁴.

Key Changes in Windfall Tax

The primary changes to the Special Additional Excise Duty (SAED) are as follows:

• Petrol Exports: The windfall tax on petrol exports has been increased ¹⁵. Specifically, it has been raised to Rs 4 per litre ⁶.
• Diesel Exports: The levy on diesel exports has been lowered ¹².
• Aviation Turbine Fuel (ATF) Exports: Similar to diesel, the tax on ATF exports has also been reduced ¹³.

Context and Implications

The windfall tax, first introduced in July 2022, is a levy on unexpectedly high profits earned by oil refiners and producers due to elevated global crude oil prices. These revisions are part of a dynamic policy approach, with the government regularly reviewing and adjusting the tax rates based on international crude oil prices and the profitability of oil companies ⁶.

While the exact reasons for this specific adjustment were not detailed in all reports, some sources indicate that the changes are being made amid "West Asia tensions," suggesting a response to geopolitical factors influencing global oil markets ⁶. The government's aim is to balance revenue generation with ensuring adequate domestic supply and managing inflation.

It is important to note that these changes specifically apply to the export of fuels and do not affect the excise duty on petrol and diesel sold within India ⁴. This means that domestic fuel prices for consumers are not directly impacted by this particular revision of the windfall tax on exports.