Centre scraps Rs 2.5/litre petrol export duty, hikes diesel levy to Rs 11.5

On October 31, the government removed the Rs 2.5-per-litre export duty on petrol. It raised high-speed diesel’s duty from Rs 8.5 to Rs 11.5. ATF’s duty rose from Rs 10.5 to Rs 11. These changes affect exporters and were intended to help manage domestic fuel availability.

These export duties began on March 27, 2026, during the West Asia crisis. The government said they would discourage exports and protect supplies for India’s domestic market. Diesel exporters now pay Rs 3 more per litre than before. Petrol exporters pay nothing under this special duty.

The rates are reviewed every fortnight using average international prices after the previous review. The latest rates took effect when published in the Gazette on October 31. Petrol exports became cheaper, while diesel and ATF exports became slightly more expensive for exporters.

A special additional excise duty, or SAED, is a government charge added to certain fuel exports. It makes exporting fuel costlier, helping the government discourage overseas sales and protect domestic availability.

For example, petrol exports previously carried SAED of Rs 2.5 per litre. On October 31, 2026, that charge was removed, while diesel’s rose from Rs 8.5 to Rs 11.5 per litre. An exporter therefore pays more per litre on diesel exports, reducing the incentive to send supplies abroad.

The duties are reviewed every fortnight using average international prices for crude oil, petrol, diesel, and ATF. The latest rates took effect when published in the Gazette on October 31. This means export costs can change as global prices and domestic supply concerns change. ATF exports now carry Rs 11 per litre, up from Rs 10.5.

The government has reset export duties on three petroleum products, effective October 31. Petrol exports now carry no special additional excise duty, while diesel and ATF face higher charges.

Previously, petrol was charged Rs 2.5 per litre, diesel Rs 8.5, and ATF Rs 10.5. The new rates remove Rs 2.5 from petrol, add Rs 3 to diesel, and add 50 paise to ATF. These duties were introduced to discourage exports and protect domestic availability during supply uncertainty.

The government reviews the levies every fortnight using average international prices after the previous review. The latest notification followed the October 16 review and took effect when published in the official Gazette. For exporters, petrol becomes cheaper to ship, while diesel and ATF exports become more expensive.

The different treatment reflects a fortnightly, product-by-product response to international prices and supply conditions, rather than one uniform tax policy. The government introduced these duties to discourage exports and protect domestic availability during the West Asia crisis.

For example, on October 31, the petrol duty fell from Rs 2.5 per litre to zero. During the same review, high-speed diesel rose from Rs 8.5 to Rs 11.5, while aviation turbine fuel increased from Rs 10.5 to Rs 11. These changes suggest petrol needed less export restraint, while diesel and aviation fuel still warranted higher charges. The article does not give a separate reason for each product’s change.

A higher export charge can make overseas sales less attractive, potentially keeping more fuel available inside India. Officials compare average international prices of crude oil, petrol, diesel, and aviation fuel after each review. Since March 27, 2026, rates have changed repeatedly. Future revisions may differ as global prices and supply concerns evolve.

When export duties make overseas sales costlier, exporters keep less money per litre. They may reduce shipments or redirect fuel to the domestic market, improving local availability. The duty does not automatically lower prices at home, because crude costs and taxes also matter.

India’s latest move shows this trade-off clearly. On October 31, it removed petrol’s Rs 2.5-per-litre export duty, but raised diesel’s from Rs 8.5 to Rs 11.5 and aviation fuel’s from Rs 10.5 to Rs 11. These charges make exports less attractive, encouraging domestic sales or smaller margins.

The policy began on March 27, 2026, during the West Asia crisis, amid supply concerns and rising global prices. Fortnightly reviews now adjust duties using average international prices. Domestic buyers may gain supply protection, but prices can still rise when international prices or taxes increase.

These export duties were introduced to keep petrol, diesel, and aviation fuel available in India during the West Asia crisis. Rising global energy prices and uncertain supplies had raised fears that exports could drain domestic stocks. The levy made exports less attractive, helping protect local availability.

The government reviews the rates every fortnight because international prices change. Each review considers average prices for crude oil, petrol, diesel, and aviation turbine fuel since the previous review. Before October 31, petrol duty was Rs 2.5 per litre, diesel duty Rs 8.5, and ATF duty Rs 10.5. This shows how rates can be adjusted as global energy conditions move.

On October 31, the Centre removed petrol’s Rs 2.5 duty. It raised diesel’s levy to Rs 11.5 and ATF’s to Rs 11. These changes show a flexible policy, adjusted as supply concerns and international prices evolve.