Government Slashes Export Duties on Fuel: What It Means for Prices

Significant Changes in Fuel Export Duties

New Delhi: The central government has announced a reduction in export duties on petrol, diesel, and aviation turbine fuel (ATF) effective from Saturday, eliminating the petrol export levy entirely and decreasing the charges on diesel and ATF.

The export duty on petrol has been cut to zero from Rs 3.5 per litre, while the diesel levy has been reduced to Rs 24 per litre from Rs 25.5. Additionally, the ATF export duty has been lowered to Rs 19.5 per litre from Rs 22, according to the official order.

These changes pertain specifically to petroleum products designated for export, and the Finance Ministry has clarified that this adjustment does not impact the excise rates for fuels intended for domestic use.

This decision follows a recent increase in export levies on these fuels, which occurred less than two weeks prior. On August 3, the export duty for petrol was raised to Rs 3.5 per litre from Rs 2.5, while diesel's levy increased to Rs 25.5 from Rs 15.5, and ATF duty was raised to Rs 22 from Rs 14.5.

The total levy on diesel includes two components: Special Additional Excise Duty and Road and Infrastructure Cess, rather than just the SAED.

The government reviews these export levies bi-weekly, basing the rates on the average international prices of crude oil, petrol, diesel, and ATF since the last review.

Duties can be applied through either SAED, RIC, or a combination of both, depending on the product and the rates set for each review period.

This current export-duty framework was established on March 27, 2026, in response to rising international crude and refined fuel prices linked to conflicts in West Asia.

The surge in international crude oil and refined fuel prices during the West Asia conflict prompted refineries to focus on exporting petroleum products, leading to the imposition of export duties to maintain domestic supply of diesel and ATF.