The government has made changes to export taxes on petroleum products, introducing a special additional excise duty (SAED) of Rs 3 per liter on petrol exports while reducing the duty on diesel to Rs 16.5 per liter, effective immediately. The Ministry of Finance notification specified the new rates, with petrol exports now subject to Rs 3 per liter and diesel to Rs 16.5 per liter. Additionally, the road and infrastructure cess on petrol and diesel exports has been eliminated.
The domestic fuel tax rates will remain unaltered as per the government’s announcement. This latest SAED levy on petrol exports is the first of its kind since the onset of the West Asia conflict. Notably, export duties on diesel and aviation turbine fuel (ATF) have been lowered from previous levels following several adjustments in recent months.
Previously, the export duty on diesel underwent several revisions, starting at Rs 21.50 per liter on March 26, then escalating to Rs 55.5 per liter on April 11. Subsequently, it was reduced to Rs 23 per liter on April 30 and has now been further decreased to Rs 16.5 per liter. Similarly, ATF experienced a similar trajectory, with duties fluctuating before settling at the current rate of Rs 16 per liter.
The introduction of the windfall tax framework aims to maintain sufficient domestic fuel supply and restrict exports amidst the volatile global oil market conditions triggered by the West Asia crisis. Despite efforts to address geopolitical tensions, uncertainties persist following the failure of the United States and Iran to reach a peace agreement, with US President Donald Trump expressing strong disapproval of Iran’s proposal.
