Petrol Diesel Export Tax : The central government has taken a major decision regarding the export of petroleum products. According to a notification issued by the Finance Ministry, the export tax on petrol has been completely removed. Meanwhile, the windfall tax on diesel and aviation fuel, known as Aviation Turbine Fuel (ATF), has been increased. The Special Additional Excise Duty on diesel has been raised by Rs 3 per litre, while the tax on ATF exports has increased by 50 paise per litre. The decision is considered significant for companies involved in oil refining and petroleum exports.

Petrol Exports Become Completely Tax-Free
Following the latest decision, companies will no longer have to pay export tax on petrol shipped from India to other countries. Previously, a duty of Rs 2.50 was imposed on every litre of exported petrol. The government has now reduced this charge to zero. This means companies exporting petrol will no longer have to pay this additional levy. In contrast, the government has taken a different approach by increasing duties on diesel and ATF. These changes represent a significant revision in the tax structure applicable to petroleum exports.

Diesel and ATF Export Duties Increased
The government has increased the Special Additional Excise Duty on diesel exports from Rs 8.50 to Rs 11.50 per litre. This represents an increase of Rs 3 per litre. Meanwhile, the export duty on ATF, which is used in aircraft, has been raised from Rs 10.50 to Rs 11 per litre. This means companies exporting aviation fuel will now pay 50 paise more per litre in tax than before. These changes will directly affect the cost of exporting these petroleum products to international markets.

No Direct Impact on Consumers
The government's decision will not directly change petrol and diesel prices in the domestic market. This is because these duties apply to fuel exported from India to other countries. Prices at petrol pumps within the country will not be directly affected by this decision. However, refinery companies involved in exports will face higher tax expenses on diesel and ATF, while the removal of the petrol export duty will provide them with some relief.

Why Does the Government Impose Windfall Taxes?
The government introduced a system of duties on petroleum product exports in March amid global uncertainty surrounding wars and crude oil supplies. The objective was to maintain fuel availability in the domestic market and prioritise domestic supplies over exports. India has traditionally imported a significant quantity of crude oil through the Strait of Hormuz. Regional tensions and disruptions involving this route had raised concerns about the continuity of supplies. Major Indian refinery companies meet domestic requirements while also exporting petroleum products to international markets. Through taxation, the government attempts to maintain a balance between exports and the availability of fuel within the country.