Government Reduces Windfall Tax on Diesel and ATF; Petrol Duty Unchanged

Effective from October 1, 2026, the government has reduced the windfall tax on diesel and aviation turbine fuel (ATF) exports, while maintaining the duty on petrol exports, as per news report.  

This follows routine adjustments in the wake of the West Asia conflict. 

Revised Export Duties for October 

For the fortnight starting October 1, 2026, the special additional excise duty (SAED) on diesel exports has been decreased to ₹16 per litre, down from the previous ₹20 per litre.  

Additionally, the SAED on ATF exports has been revised from ₹15 per litre to ₹10.5 per litre. However, the duty on petrol exports remains at ₹0.5 per litre for this period. 

Context of the Duty Adjustments 

These adjustments in the windfall tax are part of ongoing measures since March 27, when the government introduced export duties on diesel and ATF.  

The aim was to ensure sufficient domestic supply and curb the advantageous export profits amid rising global crude oil prices triggered by the ongoing conflict in West Asia. 

Alongside diesel and ATF exports, a levy was imposed on petrol exports from May 16, which continues unchanged in the latest revision. 

Domestic Duty Rates Remain Unchanged 

While export duties have been revised, the finance ministry confirmed that the duty rates for petrol and diesel meant for domestic consumption will remain unchanged. 

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Rationale Behind Windfall Tax Introduction 

The windfall tax was conceptualised during the West Asia conflict to enhance the domestic availability of fuel. It aimed to prevent exporters from excessively benefiting from disparities in local and international oil prices. 

Conclusion 

As of October 1, 2026, the government has reduced the export duty on diesel to ₹16 per litre and ATF to ₹10.5 per litre, maintaining petrol duty at ₹0.5 per litre for exports. The adjustments aim to balance domestic fuel availability and exporter profit margins amid global market shifts. 

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