Govt cuts windfall tax on fuel exports from 1 June; Relief for oil companies

The government has clarified that the changes apply only to fuel exports. Excise duty rates on petrol and diesel sold within India remain unchanged, ensuring that retail fuel prices in the domestic market are not affected by the latest revision.

Post Published By: Sujata Biswal

Updated : 31 May 2026, 3:18 PM IST

Govt cuts windfall tax on fuel exports from 1 June

New Delhi: In a move expected to provide relief to oil refiners and exporters, the Central Government has reduced the windfall tax on the export of petroleum products, including petrol, diesel, and aviation turbine fuel (ATF). The revised rates will come into effect from June 1, according to a notification issued by the Finance Ministry.

Revised Export Tax Rates

Under the new tax structure:

• Windfall tax on petrol exports has been reduced to Rs 1.5 per litre.
• Tax on diesel exports has been cut to Rs 13.5 per litre.
• Aviation Turbine Fuel (ATF) exports will now attract a tax of Rs 9.5 per litre.

The decision is expected to lower the tax burden on exporters and improve margins for oil companies operating in international markets.

No Impact on Domestic Fuel Prices

The government has clarified that the changes apply only to fuel exports. Excise duty rates on petrol and diesel sold within India remain unchanged, ensuring that retail fuel prices in the domestic market are not affected by the latest revision.

In another significant relief measure, the government has also reduced the Road and Infrastructure Cess on petrol and diesel exports to zero, further easing costs for exporters.

Why the Windfall Tax Was Introduced

India introduced the windfall tax to ensure adequate domestic fuel availability and prevent companies from earning excessive profits by exporting fuels during periods of high global prices. The tax is reviewed periodically and adjusted based on international crude oil trends and market conditions.

Linked to Global Oil Market Trends

The government has revised windfall tax rates several times over the past months, responding to fluctuations in global crude prices and geopolitical developments affecting energy supplies. The latest reduction comes as international oil markets have shown signs of stabilisation following earlier volatility triggered by geopolitical tensions.

Industry observers believe the move will boost the competitiveness of Indian fuel exports while maintaining a balance between domestic energy security and export opportunities.