India reduces diesel and ATF export duties, keeps domestic taxes unchanged

The government has cut export duties on petrol, diesel and aviation turbine fuel for the fortnight from June 1. The move follows its price-linked review mechanism, while domestic fuel excise and retail rates remain unchanged.

In Short

• Petrol export duty reduced to Rs 1.5 per litre, diesel to Rs 13.5 per litre
• ATF export duty lowered to Rs 9.5 per litre, effective for two weeks
• No change in domestic excise duties; retail fuel prices unaffected

The government has reduced export duties on petrol, diesel and aviation turbine fuel (ATF) for the fortnight beginning June 1, 2026, as part of its periodic review of levies imposed on petroleum product exports.

According to a notification issued by the government on Saturday, the export duty on petrol has been cut to Rs 1.5 per litre, while the duty on diesel has been reduced to Rs 13.5 per litre. Export duty on aviation turbine fuel has also been lowered to Rs 9.5 per litre.

The revised rates will come into effect from June 1 and remain applicable for the next fortnight. The government reviews these duties every two weeks based on prevailing international prices of crude oil and refined petroleum products.

The export levies, comprising the Special Additional Excise Duty (SAED) and the Road and Infrastructure Cess (RIC), were introduced on March 27, 2026, amid escalating geopolitical tensions in West Asia. The move was aimed at ensuring adequate domestic availability of petroleum products by discouraging excessive exports during a period of heightened uncertainty in global energy markets.

THE REVISED STRUCTURE

Under the revised structure, petrol exports will attract only a Special Additional Excise Duty of Rs 1.5 per litre, while diesel exports will be subject to an SAED of Rs 13.5 per litre. ATF exports will continue to attract only the SAED component at Rs 9.5 per litre.

The latest revision marks a significant reduction from the rates announced on May 16. At that time, the government had raised the export duty on petrol to Rs 3 per litre while reducing duties on diesel and aviation fuel to Rs 16.5 per litre and Rs 16 per litre, respectively.

Officials said the fortnightly revisions are based on average international prices of crude oil, petrol, diesel and ATF recorded since the previous review period. The mechanism is intended to allow the government to respond quickly to fluctuations in global energy markets while balancing domestic supply requirements.

The government also clarified that there is no change in the existing excise duty rates applicable to petrol and diesel sold in the domestic market. As a result, consumers are unlikely to see any immediate impact on retail fuel prices from the latest revision in export duties.

The next review of export duties is expected in mid-June.

- Ends
With inputs from Reuters