Centre hikes export duty on diesel, ATF amid West Asia uncertainty; retail fuel prices unchanged

The Centre has revised export duties on petrol, diesel and aviation turbine fuel (ATF), signalling a continued focus on protecting domestic fuel supplies as geopolitical tensions in West Asia keep global energy markets on edge.

Under a notification issued by the Ministry of Finance, "exports of motor spirit (petrol) shall attract a duty of ₹1.5 per litre, exports of high-speed diesel shall attract a duty of ₹13.5 per litre, while aviation turbine fuel exports shall be subject to a levy of ₹9.5 per litre." The revised rates will come into force from June 1 and remain effective for the next fortnight.

Keeping domestic supplies insulated

The latest revision comes against the backdrop of persistent uncertainty in West Asia, which has heightened concerns over crude oil supplies and price volatility across global markets. For India, the world's third-largest importer and consumer of crude oil, ensuring adequate availability of refined petroleum products remains a key policy priority.

The revised export duties are aimed at discouraging excessive overseas shipments of petroleum products during periods of market turbulence, thereby ensuring sufficient supplies for domestic consumption.

Fortnightly review mechanism remains in place

The export levies comprise the Special Additional Excise Duty (SAED) and the Road and Infrastructure Cess, which were introduced on March 27 this year. According to the Finance Ministry, these duties are reviewed every fortnight based on the average international prices of crude oil as well as refined products such as petrol, diesel and ATF.

The periodic review mechanism allows the government to respond swiftly to changes in global energy markets while balancing the interests of domestic consumers and refiners. Export duties are typically adjusted in line with international price trends and refining margins.

Industry observers note that such levies can influence export economics for refiners, particularly in products such as diesel and aviation fuel where international demand remains robust. However, the measures are primarily intended to maintain domestic energy security during periods of heightened geopolitical risk.

The Finance Ministry has clarified that there is no change in the existing excise duty rates applicable to petrol and diesel sold in the domestic market. Consequently, the revised export duties will not have any direct impact on fuel prices paid by retail consumers.