Government Hikes Export Duties on Diesel and Aviation Turbine Fuel

The Central Board of Indirect Taxes and Customs (CBIC) issued a notification on June 17, 2026, announcing an upward revision in the Special Additional Excise Duty (SAED)—commonly known as the windfall tax—on the export of petroleum products. The tax on the export of diesel has been increased, alongside a corresponding hike in the export duty on Aviation Turbine Fuel (ATF).

Reasons for the Hike

The revision is part of the government's fortnightly review mechanism, which calibrates export duties based on average international crude oil prices over the preceding two weeks. With global crude prices surging past $96 per barrel due to the renewed conflict in the Middle East and subsequent production uncertainties, Indian oil refiners were poised to make extraordinary profits (windfall gains) by exporting fuel rather than selling it in the domestic market.

Domestic Impact

By increasing the export levies, the government aims to disincentivize the excessive export of refined petroleum products. This ensures that domestic supplies of diesel and ATF remain adequate, preventing artificial shortages and stabilizing retail fuel prices within India. The tax on domestically extracted crude oil was also marginally increased to capture the higher realization margins of domestic producers like ONGC and Oil India.