New Delhi: The government has reduced the windfall gains tax on exports of diesel and Aviation Turbine Fuel (ATF) for the fortnight beginning October 1, 2026, while keeping the export duty on petrol unchanged.

Under the revised rates, the levy on diesel exports has been cut to ₹16 per litre from ₹20 per litre, while the duty on ATF exports has been reduced to ₹10.5 per litre from ₹15 per litre. The export duty on petrol remains unchanged at ₹0.5 per litre for the next fortnight.

The revised rates take effect from October 1, according to a Finance Ministry notification. The government reviews these levies every fortnight, taking into account movements in international crude oil and petroleum product prices.

Diesel export levy reduced by ₹4 per litre

The combined rate of Special Additional Excise Duty (SAED) and Road and Infrastructure Cess on diesel exports has been lowered by ₹4 per litre.

The levy now stands at ₹16 per litre, compared with ₹20 per litre under the previous fortnight’s rates.

The reduction lowers the tax burden on refiners exporting diesel from India. The impact on individual companies will depend on their export volumes, refining margins and international product prices.

India is a significant exporter of refined petroleum products, with refiners supplying products to overseas markets when economics and global demand support exports.

ATF duty cut to ₹10.5 per litre

The government has also reduced the export levy on Aviation Turbine Fuel.

The ATF export duty has been cut to ₹10.5 per litre from ₹15 per litre, a reduction of ₹4.5 per litre.

ATF, commonly known as jet fuel, is used by airlines and is an important refined petroleum product in India’s energy and transportation markets.

The reduction in the export levy comes as the government continues to adjust petroleum-product taxes in response to changing international market conditions.

Petrol export duty remains at ₹0.5 per litre

Unlike diesel and ATF, the export duty on petrol has not been changed.

The rate remains at ₹0.5 per litre for the fortnight beginning October 1.

The government had previously reduced the petrol export levy sharply as part of its fortnightly revisions. The latest decision therefore leaves petrol at the rate fixed during the preceding review.

The differing rates across petrol, diesel and ATF reflect the government’s approach of reviewing each petroleum product based on prevailing international prices and market conditions.

No change in domestic petrol and diesel duty

The latest notification applies to exports and does not change the existing excise duty rates on petrol and diesel cleared for domestic consumption.

This distinction is important for consumers because a reduction in the export levy does not automatically mean a reduction in petrol or diesel prices at Indian fuel stations.

The government has separately maintained domestic fuel duties while adjusting export levies according to international market conditions.

Therefore, the latest announcement primarily affects the economics of exporting refined petroleum products rather than directly changing the tax component of domestic retail fuel prices.

Why India introduced the windfall tax

India introduced the current export levies on petrol, diesel and ATF on March 27, 2026, against the backdrop of the West Asia crisis and disruptions in global energy markets.

The government said the measures were intended to encourage adequate domestic availability of petroleum products by discouraging excessive exports. The levies also sought to prevent exporters from benefiting disproportionately from differences between domestic and international fuel prices during periods of elevated global crude prices.

The rates are not fixed permanently. Instead, the government reviews them every two weeks based on average international prices of crude oil and petroleum products during the relevant period.

That mechanism has resulted in multiple increases and reductions in export duties during 2026 as global energy markets have changed.

Export duties have changed sharply this year

The latest reduction is part of a series of changes to India’s fuel-export tax regime.

In September, the government had reduced the diesel export levy to ₹20 per litre from ₹25 per litre, while cutting the ATF levy to ₹15 per litre from ₹19 per litre. Petrol’s export duty was reduced to ₹0.5 per litre from ₹1.5 per litre at that time.

The September revision itself followed earlier changes as international crude and refined-product prices moved amid geopolitical tensions.

In July, for example, the government had raised the diesel export levy to ₹15.5 per litre from ₹8.5 per litre and the ATF levy to ₹14.5 per litre from ₹7.5 per litre, while reducing the petrol export duty.

These frequent revisions highlight the sensitivity of the windfall tax regime to global oil-market movements.

Impact on Indian refiners

The reduction in export duties could provide some relief to refiners that sell diesel and ATF into overseas markets.

Lower export levies can improve the realisation received by exporters when international product prices remain unchanged. However, the overall impact on profitability also depends on crude prices, refining margins, freight costs, exchange rates and demand in international markets.

India’s large refiners, including state-owned oil marketing companies and private-sector refiners, have significant exposure to international refined-product markets.

The latest move therefore comes at a time when global oil markets continue to be influenced by geopolitical developments and changes in shipping and supply routes.

Fortnightly review keeps fuel taxes flexible

The government’s decision illustrates how the windfall tax regime is being used as a flexible policy instrument rather than a permanent fixed-rate export tax.

When international prices and refining margins rise sharply, higher export levies can capture part of the additional gains and discourage excessive overseas shipments. When market conditions ease, the government can reduce the levy.

The latest notification lowers the diesel and ATF rates while maintaining the petrol rate, reflecting the differences in international pricing conditions for the three products.

For exporters, the next fortnightly review will once again depend on movements in global crude and refined-product prices.

For domestic consumers, however, the government has made clear that the latest changes do not alter the existing excise duty rates on petrol and diesel sold in the domestic market.