India Raises Windfall Tax on Petrol Exports to ₹2.50 per Litre, Cuts Diesel Tax
New Delhi: The Central Government has revised windfall taxes on petrol and diesel exports, increasing the levy on petrol to ₹2.50 per litre while reducing the tax on diesel exports by ₹7.50 per litre. The revised rates came into effect on October 16, 2026, according to the report.
Under the new decision, the tax on petrol exports has been increased by ₹2 per litre. Meanwhile, the levy on diesel exports has been reduced from ₹16 to ₹8.50 per litre. The export duty on Aviation Turbine Fuel (ATF) remains unchanged.
New Windfall Tax Rates on Petrol and Diesel
The revised rates are as follows:
- Petrol exports: ₹2.50 per litre, increased by ₹2.
- Diesel exports: ₹8.50 per litre, reduced by ₹7.50.
- ATF exports: No change in the existing levy.
The changes apply to fuel exports. The government has not changed the existing duties on petrol and diesel supplied for domestic consumption.
Will Petrol and Diesel Prices Increase in India?
The change in windfall tax rates is not expected to directly affect domestic petrol and diesel prices. The government has left the existing duties on fuel supplied for domestic consumption unchanged.
Therefore, the revision in export taxes alone does not mean that petrol and diesel will become more expensive or cheaper for consumers in India.
Petrol and Diesel Prices Remain Unchanged in Delhi
Following the late-night tax revision, oil marketing companies HPCL, IOCL and BPCL released fuel prices on Friday morning.
According to the report, petrol in Delhi was priced at ₹102.12 per litre, while diesel remained at ₹95.20 per litre. Both rates were unchanged.
How Are Petrol and Diesel Prices Decided in India?
Fuel prices depend on several factors, including crude oil prices, taxes and decisions by oil marketing companies.
Government-owned oil marketing companies play a major role in fuel distribution across India. Private fuel retailers, including Nayara Energy and Reliance-BP, also set their prices.
The level of taxes on fuel can influence how changes in international crude oil prices affect retail prices. Higher duties can reduce the extent to which fluctuations in crude oil prices are reflected in consumer prices.
Windfall Tax Reviewed Every 15 Days
The government reviews windfall tax rates every 15 days, taking into account fluctuations in international crude oil and petroleum product prices.
The tax is intended to help maintain a balance between fuel exports and domestic availability.
India first introduced a windfall tax on fuel exports in July 2022. The taxes were withdrawn about two years later. According to the report, the government reintroduced the levy in March 2026 after crude oil prices rose during the conflict involving Iran, the United States and Israel.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.
