Centre Scraps Export Duty on Petrol, Raises Levies on Diesel and ATF

The Ministry of Finance has eliminated the special additional excise duty on petrol exports while increasing the tax rates on high-speed diesel and aviation turbine fuel. The revised rates came into effect on October 31 following notification in the Official Gazette.

The Centre has scrapped the special additional excise duty (SAED) on petrol exports, bringing the levy down to nil from Rs 2.5 per litre. Simultaneously, the government has increased the export levies on high-speed diesel and aviation turbine fuel (ATF), according to notifications issued by the Ministry of Finance.

Under the updated regulations, the levy on high-speed diesel has been raised to Rs 11.5 per litre from its previous rate of Rs 8.5 per litre. Separately, Notification No. 56/2026-Central Excise has increased the SAED applicable to ATF to Rs 11 per litre, up from Rs 10.5 per litre. The revised rates became effective on October 31, the date of their publication in the Official Gazette.

The government initially introduced export levies on petrol, diesel, and ATF on March 27, 2026, against the backdrop of the West Asia crisis. The stated objective behind these duties was to ensure adequate domestic availability of petroleum products by discouraging outward shipments during a period of international energy price volatility and supply uncertainties.

The Department of Revenue under the Ministry of Finance reviews these tax rates on a fortnightly basis. These adjustments take into account the average international prices of crude oil, petrol, diesel, and ATF recorded since the previous review period. Consequently, the rates have undergone multiple revisions since their inception to reflect ongoing movements in global energy markets.

In the previous revision, which became effective on October 16, the SAED was fixed at Rs 2.5 per litre for petrol, Rs 8.5 per litre for diesel, and Rs 10.5 per litre for ATF. The latest notifications remove the duty on petrol exports entirely while raising the tax burden on diesel and ATF shipments.

"The fortnightly adjustment of the special additional excise duty on petroleum exports reflects the government's responsive approach to fluctuating global energy markets. By removing the levy on petrol while increasing rates on diesel and ATF, policy makers continue to balance domestic availability with international price movements. Businesses operating in the energy and logistics sectors must closely monitor these regular revisions, as shifting tax structures directly impact export margins and operational planning." — Dr. Shishir Gupta, Founder & CEO, StartupLanes