Government Reduces Export Levies Amid Global Oil Volatility
In a bid to ease the pressure on Indian oil exporters, the Modi administration announced on August 15 a cut in the windfall tax applied to petroleum exports. The diesel export duty is now Rs 24 per litre, down from Rs 25.5, and the petrol export levy has been completely removed, falling from Rs 3.5 to zero. Aviation turbine fuel (ATF) export duty also sees a reduction, now Rs 19.5 per litre instead of Rs 22.
The policy shift follows a period of heightened uncertainty in crude markets, with Brent oil prices lingering around USD 87 a barrel due to ongoing tensions in the Middle East. The windfall tax, first imposed in July 2022, was re‑introduced in March 2026 when oil prices spiked again. It is designed to collect a share of the extraordinary gains that exporters earn when international prices rise sharply.
Although the levy cut lightens the fiscal load on companies that ship fuel abroad, it does not automatically lower retail prices. The latest fuel rates, announced for the national holiday, remain steady across the country. Below is the current pricing snapshot for major Indian metros:
- Lucknow – Petrol Rs 102.31, Diesel Rs 95.79 - Noida – Petrol Rs 101.96, Diesel Rs 95.44 - New Delhi – Petrol Rs 102.12, Diesel Rs 95.20 - Mumbai – Petrol Rs 111.21, Diesel Rs 97.83 - Bengaluru – Petrol Rs 111.68, Diesel Rs 99.56 - Hyderabad – Petrol Rs 115.43, Diesel Rs 103.58 - Chennai – Petrol Rs 107.77, Diesel Rs 99.55 - Kolkata – Petrol Rs 113.51, Diesel Rs 99.82 - Gurugram – Petrol Rs 102.97, Diesel Rs 95.64 - Jaipur – Petrol Rs 112.69, Diesel Rs 97.78 - Pune – Petrol Rs 112.02, Diesel Rs 98.66 - Ahmedabad – Petrol Rs 101.81, Diesel Rs 97.92 - Chandigarh – Petrol Rs 102.01, Diesel Rs 94.08 - Patna – Petrol Rs 113.37, Diesel Rs 99.36 - Thiruvananthapuram – Petrol Rs 114.80, Diesel Rs 103.64
Future revisions to the export duty will depend on how international crude prices evolve. For consumers, the main determinants of pump price remain the global oil price, exchange rate movements and domestic taxation, rather than the export levy itself.