The Central government today enhanced windfall tax on export of diesel and aviation turbine fuel (ATF) to manage domestic supply and suppress windfall gains by refiners. 

Through a notification issued earlier today, the union finance ministry more than doubled the excise duty on diesel to Rs 55.5 per litre from Rs 21.5 per litre earlier. 

Also, export duty on ATF has been increased from Rs 29.5 per litre to Rs 42 per litre, while the export duty on petrol continues to remain nil.

Amid the ongoing West Asia crisis, the government reinstated windfall tax - Special Additional Excise Duty on fuel exports,  imposing levies of Rs 21.5 per litre for diesel and Rs 29.5 per litre on ATF. It may be noted that this tax was scrapped in December 2024. 

However, the government reintroduced it in the wake of high refinery profits and concerns pertaining to domestic availability. 

Last month, the government had also sharply reduced excise duty on petrol to ₹3 per litre and fully exempted diesel from the levy, in a bid to cushion oil marketing companies from surging global crude prices triggered by the conflict. 

In a notification dated March 26, the Finance Ministry cut excise duty on petrol from ₹13 per litre to ₹3 per litre while reducing the duty on diesel from ₹10 per litre to nil. The revised rates have come into effect immediately. In the wake of the crisis, global crude prices had touched $119 per barrel last month and have now eased to around $98 per barrel. 

While imposing SAED last month, the government had said it will review the windfall tax on diesel and aviation turbine fuel (ATF) every fortnight. 

Last month's levy imposition on diesel and ATF is expected to generate around ₹1,500 crore over a fortnight, even as the Centre has reduced excise duties on petrol and diesel to cushion consumers, which translates into an outgo of about Rs 7000 crore. 

The government, however,  has said the imposition of windfall tax is not aimed at revenue maximisation and is intended to improve domestic availability of diesel and ATF. 

The government on imposed an export duty of ₹21.5 per litre on diesel and ₹29.5 per litre on ATF to discourage overseas shipments and prioritise domestic supply. 

The SAED, first introduced in July 2022 following the Russia's invasion of Ukraine to curb windfall gains by refiners, had been withdrawn in December 2024 before being reintroduced.