Windfall tax on exports of diesel and aviation turbine fuel (ATF) has been reduced with effect from May 1, 2026. Excise duty on petrol and diesel sold in the domestic market will remain unchanged. The duty on diesel exports has been reduced from Rs 55.5 per liter to Rs 23 per litre, while the duty on ATF exports has been reduced to Rs 33 per liter from the earlier Rs 42 per litre.In a statement, the Finance Ministry also announced that road and infrastructure cess on diesel exports will be waived off for the next fortnight starting May 1. Meanwhile, export duty on petrol will remain at zero.Earlier on March 26, the government had imposed export duty of Rs 21.50 per liter on diesel and Rs 29.5 per liter on ATF. Later, during the review on April 11, these rates were increased to Rs 55.5 per liter for diesel and Rs 42 per liter for ATF.The windfall tax was introduced to ensure that adequate domestic supplies of petroleum products remain available amid supply disruptions resulting from conflicts involving the United States, Israel, and Iran. The aim was to prevent exporters from making excessive profits from the widening gap between domestic and international fuel prices as the global crude market rose sharply.According to the ministry, the export duty structure is aimed at discouraging excessive foreign shipments during the ongoing Middle East crisis, thereby safeguarding domestic fuel availability.Following military attacks by the United States and Israel on Iran on February 28, Tehran launched widespread retaliatory measures, escalating tensions across the Middle East. India’s oil supplies through the Strait of Hormuz remain constrained, but its diverse procurement basket and the availability of millions of barrels of Russian crude on the water have helped ease supply constraints for the time being.Since the conflict began, crude oil prices have risen sharply, rising from around $73 a barrel to a four-year high of $126 a barrel.
