The Centre has revised the windfall tax structure on fuel exports, increasing the levy on diesel and aviation turbine fuel (ATF) while lowering the tax on petrol exports. The revised rates came into effect
on July 16 as part of the government’s fortnightly review.
According to notifications issued by the Finance Ministry, the export duty on petrol has been cut to Rs 2.5 per litre from Rs 4 per litre. At the same time, the windfall tax on diesel exports has been increased to Rs 15.5 per litre, up from Rs 8.5 per litre, while the levy on ATF exports has been raised to Rs 14.5 per litre from Rs 7.5 per litre.
The latest revision comes against the backdrop of heightened volatility in global crude markets. Brent crude rose nearly 2% on Wednesday to touch a one-month high of $84.73 per barrel after the United States reinstated a naval blockade on Iran, fuelling concerns over potential disruptions to oil shipments through the Strait of Hormuz. The strategic waterway previously handled about one-fifth of global oil flows.
Oil prices also drew support from renewed geopolitical tensions and attacks on oil tankers, although worries over inflation and slowing global demand limited further gains. Meanwhile, tighter diesel supplies, including reduced exports from Russia, have pushed up refining margins and added pressure to global fuel markets.
Earlier, on June 11, the Centre had temporarily prohibited industrial, commercial and institutional consumers from purchasing petrol and diesel from retail fuel stations. Instead, these consumers were directed to procure fuel through bulk supply channels to ensure adequate retail availability and discourage hoarding and diversion.
The government had cited disruptions to global petroleum supply chains and shipping logistics arising from the prevailing geopolitical situation. It also noted an unusual rise in retail fuel purchases by bulk consumers, who shifted away from dedicated supply channels due to a widening price difference.
At the time, retail diesel in Delhi was priced at Rs 95.20 per litre, while bulk consumers were paying Rs 134.50 per litre. The gap emerged after state-run oil marketing companies kept retail prices lower to shield consumers from higher international fuel costs, while bulk buyers continued to pay market-linked rates.
Under the temporary order, diesel sales at retail pumps were restricted to vehicle fuel tanks or Petroleum and Explosives Safety Organisation (PESO)-approved containers, with purchases capped at 200 litres per customer or vehicle per day. The restrictions, enforceable for up to 90 days and extendable through a fresh order, carried penalties under the Essential Commodities Act for violations.
The Centre subsequently withdrew the restrictions on June 29, with the relaxation taking effect from July 1.
