India Removes Petrol Export Levy as Diesel, Jet Fuel Duties Rise

India has eliminated the special additional excise duty on petrol exports, bringing it down to zero. Simultaneously, the government has increased the special export duty on diesel by Rs 3 per litre and on aviation turbine fuel by Rs 0.50 per litre.

The Finance Ministry confirmed the decision through a notification issued on Saturday.

What changes for exporters

The petrol export duty has fallen to zero from Rs 2.5 per litre. Diesel exporters will now pay Rs 11.50 per litre, up from Rs 8.5 per litre. The duty on ATF exports has moved to Rs 11 per litre from Rs 10.50 per litre.

Reason behind the export duties

The government first introduced the export duties at the end of March, when the Middle East conflict disrupted global energy flows and drove up international crude prices. These duties are reviewed by the Centre every 15 days.

Policymakers want to keep refiners from diverting supplies abroad instead of serving domestic buyers, particularly when overseas prices offer better returns.

Oil prices keep climbing

Escalating tensions between the United States and Iran, and the closure of the Strait of Hormuz, have continued to push crude prices higher. Brent crude, the benchmark grade, has reached $113.10 per barrel. It has risen 1.55 per cent over the past week and 15.71 per cent over the past month, and has gained around 26 per cent in the last three months.

Dependence on Hormuz route

Before the conflict, roughly 45 per cent of India's crude imports moved through the Strait of Hormuz, a vital sea lane linking the Persian Gulf to global markets. Obstruction to commercial shipping on this route has compelled India to seek other sources for its crude oil needs.