Diesel & ATF Export Duties Hiked but Reliance
SEZ in Jamnagar Exempted!
Ø Petrol not Covered, Export will Make up for under Recovery, Current Petrol
Export Duty is Nil with International Price at $1.48 (Rs. 133 per litre)
Ø Past Contracts not Honoured
Ø
The
duty on export of diesel was more than doubled to Rs 55.5 per litre from Rs
21.5 per litre, Jet fuel exports, the levy was hiked to Rs 42 per litre from Rs
29.5 per litre with immediate effect, according to notifications issued by the
Finance Ministry
·
Diesel export duty raised to ₹55.5/litre
(from ₹21.5).
·
ATF (jet fuel) export duty increased to ₹42/litre
(from ₹29.5).
·
Petrol export duty remains Nil.
2. Objective
·
Discourage fuel exports amid high global prices.
·
Ensure adequate domestic availability.
·
Prevent refiners from exploiting price
differences between domestic and global markets.
3. Windfall Tax Mechanism
·
Export duties imposed from March 27, 2026.
·
Designed as windfall gain taxes (excise duties).
·
Reviewed fortnightly based on global price movements.
4. Domestic Price Situation
·
OMCs have not fully passed global price rise
to consumers.
·
Under-recoveries:
o
Petrol: ~₹24.40/litre
o
Diesel: ~₹104.99/litre
·
ATF prices only partially increased
domestically.
5. Revenue Impact
·
Estimated ₹1,500 crore per fortnight
from export duties.
·
Much lower than ₹7,000 crore/fortnight
loss due to excise duty cuts on domestic fuels.
6. India’s Refining Position
·
Refining capacity: ~260 mtpa.
·
India is a net exporter of refined fuels
like diesel and ATF.
7. SEZ Exemption
·
Export duties not applicable to SEZ
refineries like
o
Reliance Industries’ Jamnagar refinery.
·
Based on judicial provisions and past policy.
8. Global Trigger
·
War in West Asia disrupted the
o
Strait of Hormuz.
·
Around 20% of global oil supply affected.
·
Result: sharp rise in global fuel prices and
refining margins.
9. Overall Impact
·
Ensures domestic fuel security.
·
Limits export gains for refiners.
·
Helps manage supply amid global uncertainty.
·
Excise (5)
Notifications Issued in this Effect as below:
Notification Rates
|
Subject |
Notification No./Date |
Current Rate |
Previous Rate |
|
16/2026-Central
Excise/11-Apr-2026 |
Rs. 24
per litre |
Rs.
12 per litre |
|
|
17/2026-Central
Excise/11-Apr-2026 |
Rs. 42
per litre |
Rs.
29.5 per Litre |
|
|
18/2026-Central
Excise/11-Apr-2026 |
Rs.
31.5 per litre |
Rs.
9.5 per Litre |
Schedule Rates
|
Subject |
Notification No./Date |
Current Rate |
Previous Rate |
|
14/2026-Central
Excise/11-Apr-2026 |
Rs. 24
per litre |
Rs. 12
per litre |
|
|
15/2026-Central
Excise/11-Apr-2026 |
Rs. 36
per litre |
|
[ABS News Service/13.04.2026]
Amid
the surge in global oil and fuel prices due to the West Asia war, the government
on Saturday significantly hiked the export duties on diesel and aviation
turbine fuel (ATF), or jet fuel, to dissuade refiners from exporting the fuels
and ensure adequate availability in the domestic market. The duty on export of
diesel was more than doubled to Rs 55.5 per litre from Rs 21.5 per litre, while
on jet fuel exports, the levy was hiked to Rs 42 per litre from Rs 29.5 per
litre with immediate effect, according to notifications issued by the Finance
Ministry. The export duty on petrol continues to be nil.
The
export levies, or windfall gains taxes—in the form of excise duties—were
imposed from March 27 with the objective of ensuring adequate availability of
these fuels in the domestic market by disincentivising exports amid a major
price difference between domestic and international markets. Public sector oil
marketing companies (OMCs) have not hiked diesel and petrol prices in the
domestic market, even as prices have surged in the international market. As for
ATF, only a fraction of the international price pressure was passed on for
domestic flights. According to the government, these duties are not for
boosting government revenue, but to not allow fuel exporters to take undue
advantage of the price differences.
“At
a time when international diesel prices have surged sharply, the levy is
designed to disincentivise exports and ensure that refinery output is directed
first towards meeting domestic demand. Keeping Indian pumps fully supplied
takes precedence over export opportunities, however commercially attractive
those may be at current global prices,” the Petroleum Ministry had said in a
release on March 27. Central Board of Indirect Taxes and Customs (CBIC)
Chairman Vivek Chaturvedi had said that these duty rates will be reviewed on a
fortnightly basis to align the duties with prevailing fuel prices in the
international market.
At
the rates announced that took effect on March 27, the revenue gain from export
duties was estimated at around Rs 1,500 crore in a fortnight, as per
back-of-the-envelope calculations by the government. The hike in export duties
could lead to higher revenue gains. Along with the export duties on diesel and
jet fuel, the government on March 27 had also slashed excise duty on domestic
sales of petrol and diesel to provide some relief to the OMCs that have been
incurring heavy losses on fuel sales. The gains from export duties on diesel
and ATF would only be a fraction of the estimated Rs 7,000 crore per fortnight
of revenue loss the government will bear due to the excise duty cut.
India’s
total refining capacity stands at around 260 million tonnes per annum (mtpa), which is more than the domestic consumption, making
India a net exporter of refined fuels. Diesel and ATF are the major petroleum
fuels that India exports.
The
export levies on diesel and ATF are not applicable to fuel exports from
Reliance Industries (RIL) special economic zone (SEZ) refinery. RIL’s Jamnagar
mega refining complex—the largest single-location refining complex in world—has
a 35.2-million-tonnes-per-annum (mtpa) SEZ refinery
and a 33-mtpa domestic tariff area (DTA) refinery. According to the CBIC,
export duties are not applicable to SEZ refineries as per judicial
pronouncements. Even when similar duties were imposed in the wake of Russia’s
invasion of Ukraine, the government had explicitly exempted SEZ refineries from
the levies.
With
the West Asia war effectively closing off the critical maritime chokepoint of
the Strait of Hormuz, crude oil and fuel prices have surged globally. India
depends heavily on oil and gas imports to meet its energy needs, and fuel
prices in the country are linked to global oil and fuel price benchmarks. With
the effective halt in vessel movements through the Strait of Hormuz—from where
one-fifth of global oil and natural gas flows usually transited—global energy
supplies have been hit and prices have skyrocketed. While India has been in a
comfortable position with regard to crude oil, petrol, and diesel availability,
it still has to bear the brunt of high prices.
“With
global petroleum prices up by upto 100% in the last 1
month, PSU OMCs are incurring under-recoveries of Rs 24.40/litre on petrol and
Rs 104.99/litre on diesel at RSP (retail selling price) level as on
01.04.2026,” the MoPNG had said in an April 1 post on
X. Since the beginning of the West Asia war on February 28, global ATF prices
have almost doubled to $195.19 per barrel for the week ended March 27 from
$99.40 for the week ended February 28, as per the data compiled by IATA, the
global industry body of airlines. The crack spread—difference between the price
of crude oil and products like ATF derived from it—trebled to $81.44 per barrel
for the week ended March 27 from $27.83 for the week ended February 27.