Government Cuts Export Duty On Diesel And ATF, Raises Petrol Levy As Oil Prices Retreat

The central government revised export duties on petroleum products from 1 July, lowering levies on diesel and aviation turbine fuel while raising the duty on petrol, reflecting the sharp fall in global crude prices following the easing of West Asia tensions and the reopening of the Strait of Hormuz.

The revised rates are effective from 01 July:

• Petrol: ₹4 per litre, up from ₹1.5 per litre.

• Diesel: ₹8.5 per litre, down from ₹14 per litre.

• Aviation turbine fuel: ₹7.5 per litre, down from ₹12.5 per litre.

Domestic excise duties on petrol and diesel for retail consumption remain unchanged, meaning the revision has no immediate impact on pump prices for Indian consumers.

Why The Rates Moved The Way They Did

Oil prices have dropped sharply from highs of more than $126 a barrel as geopolitical tensions eased. Economists and analysts now expect Brent crude to average $84.50 a barrel in 2026, lower than the $90.44 a barrel forecast they made last month.

Lower global oil prices have also reduced the profitability of exporting diesel and aviation turbine fuel (ATF). To support refiners, the government cut export duties on both fuels.

At the same time, it raised the export duty on petrol. The move aims to discourage refiners from exporting more petrol and help maintain adequate domestic supplies as demand remains steady.

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Expanded Exemptions For Strategic Partners

The government also extended the list of countries eligible for exemption from export levies on petroleum products sold by state-run oil marketing companies. Mauritius and the Maldives have been added to the existing exemption list that previously covered only Nepal, Bhutan, Bangladesh and Sri Lanka. Public sector refiners can now supply petroleum products to six countries without attracting export duties.

The export levy mechanism is reviewed every fortnight in line with movements in global crude and refined fuel prices, allowing the government to respond quickly to changing market conditions. India originally introduced export curbs in March amid the West Asia conflict, when supply disruption concerns were at their peak.