The Centre has revised windfall taxes on fuel exports, raising the levy on diesel and aviation turbine fuel (ATF) while reducing the duty on petrol exports. The latest changes come as global crude oil prices have rebounded sharply in July, prompting a review under the government’s fortnightly windfall tax mechanism.
The revised rates will come into effect from July 16, according to a Finance Ministry notification.
Diesel and ATF export duties increased
Under the revised structure, the export duty on diesel has been increased to Rs 15.5 per litre from Rs 8.5 per litre. The windfall tax on aviation turbine fuel exports has also been raised to Rs 14.5 per litre, up from Rs 7.5 per litre.
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At the same time, the government has reduced the export duty on petrol to Rs 2.5 per litre from the earlier Rs 4 per litre.
The move reflects changing global energy market conditions, with crude oil prices recovering after several months of weakness.
Brent crude rebounds in July
Brent crude has gained around 17% in July after posting losses for three consecutive months through June. Last month also marked the benchmark’s steepest monthly decline since the Covid-19 pandemic in 2020.
On Wednesday, Brent crude rose about 2% to touch a one-month high of $84.73 per barrel after the United States resumed a naval blockade of Iran. The development renewed concerns over oil supplies moving through the Strait of Hormuz, one of the world’s most important shipping routes that handled nearly one-fifth of global oil flows before the conflict.
Geopolitical risks keep fuel markets on edge
Crude oil prices have also been supported by renewed geopolitical tensions and attacks on oil tankers. However, concerns over inflation and slower global demand have limited further gains.
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Meanwhile, reduced diesel exports from Russia have tightened supplies and lifted diesel refining margins, adding further pressure to fuel markets.
Earlier this month, on July 1, state-run oil marketing companies had lowered ATF prices by around Rs 5 per litre after crude oil prices eased as geopolitical tensions in West Asia showed signs of cooling. The latest revision marks another adjustment under the government’s regular review of windfall taxes linked to global energy prices.
FAQs:
Why did the Centre revise fuel export duties?
The government revised export duties after global crude oil prices rebounded sharply, triggering a scheduled review of the windfall tax.
What are the new export duties on diesel, ATF and petrol?
From July 16, diesel export duty is Rs 15.5/litre, ATF Rs 14.5/litre, while petrol export duty has been reduced to Rs 2.5/litre.