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India Slashes Diesel Duty, Hikes Petrol Tax
16 Oct
Summary
- India raised petrol export duty to ₹2.5 per litre.
- Diesel export duty was cut to ₹8.5 per litre.
- Windfall taxes on fuel exports were reintroduced in March 2026.
As of October 16, 2026, India has implemented a notable shift in its policy concerning windfall taxes on fuel exports. The government has increased the export duty on petrol to ₹2.5 per litre. This represents a significant hike from the previously mandated 0.5 rupees per litre.
In parallel, a reduction in the export duty for diesel has been enacted, lowering it to ₹8.5 per litre from the earlier ₹16 per litre. These adjustments, which became effective on October 16, 2026, are part of a broader strategy. India first introduced windfall taxes on fuel exports in July 2022, later withdrawing them. The tax was then reintroduced in March 2026 following a surge in crude oil prices.
The review and adjustment of these export duties occur every fortnight. This process ensures that the tax rates remain aligned with the dynamic movements observed in international crude oil and petroleum product prices. This dynamic approach allows the government to respond to global market volatility.
