India on Tuesday lowered windfall taxes on exports of diesel and aviation turbine fuel as global oil prices ease, while raising the duty on petrol exports, according to a government order. The duty on diesel exports has been cut to 8.5 rupees per litre from 14 rupees, while the aviation turbine fuel duty has been set at 7.5 rupees/litre, down from 12.5 rupees. The export duty on petrol has been increased to 4 rupees per litre from 1.5 rupees to ensure domestic supply.
The Finance Ministry, in a notification, said the duty hikes will be effective from July 1.
The exemption from these export duties has been extended to Mauritius and Maldives, in addition to existing relaxations for select neighbouring countries such as Nepal, Bhutan, Bangladesh, and Sri Lanka.
Notably, the ministry said that there is no change in the current excise duty rates on petrol and diesel meant for domestic consumption, ensuring that local retail prices remain unaffected.
This comes a day after the central government lifted restrictions on the sale of petrol and diesel. The government said in order on Monday thatthe restrictions on sale of petrol and diesel, imposed this month amid disruptions to global supply chains due to the US-Iran war, will be lifted on July 1.
Earlier this month, the government had barred commercial fuel buyers from purchasing petrol and diesel from retail stations and capped daily diesel purchases to prevent local shortages.
“The temporary measures were considered necessary and expedient in the public interest to maintain supplies of motor spirit (petrol) and high speed diesel…and secure their equitable distribution and availability at fair prices,” the June 29 order said.
After a review of the prevailing supply situation of petroleum products in the country, the ministry said it is “satisfied” that it is no longer necessary in the public interest to continue with the June 12 order.
“Therefore, in exercise of powers conferred by clause 3 of the Motor Spirit and High Speed Diesel (Temporary Regulation of Supply through Retail Outlets) Order, 2026, the Central Government hereby withdraws its Order of even number dated 12th June, 2026 with effect from 1st July, 2026,” it said.
The move follows an improvement in crude oil and fuel supplies from Gulf producers after tensions in the region eased, allowing energy shipments through the Strait of Hormuz to resume.
