India Cuts Windfall Tax on Fuel Exports Amid Global Oil Price Volatility
India has reduced its windfall tax on exports of petrol, diesel, and aviation turbine fuel (ATF), in response to volatile global oil markets and Middle East tensions. The new rates took effect on September 16 and will remain in force for the current fortnight before the next scheduled review.
The petrol export levy has been reduced to INR 0.5 per litre from INR 1.5, while the total levy on diesel has been cut to INR 20 from INR 25 per litre. The ATF levy has been lowered to INR 15 from INR 19 per litre.
The latest reduction comes amid sharp movements in global oil prices as markets assess the impact of supply disruptions and geopolitical tensions in the Middle East. India has been revising petroleum export levies every two weeks since the duties were introduced in March 2026, with the government saying the measures are intended to help maintain domestic availability of petroleum products while responding to changing international market conditions.
The direction of global crude prices remains closely linked to developments in the Middle East and the extent to which supply disruptions continue. A sustained rise in crude prices could increase India's import bill and affect refinery margins, while lower prices could ease some pressure on energy costs.