Revised Fuel Export Taxes Take Effect From May 16

The Ministry of Finance on Friday announced changes in windfall gain taxes on petroleum product exports, including the imposition of a Rs 3 per litre tax on petrol exports.

According to an official notification, the government also reduced the windfall levy on diesel exports to Rs 16.5 per litre and on aviation turbine fuel (ATF) exports to Rs 16 per litre. The revised rates came into effect from May 16.

The ministry further clarified that the road and infrastructure cess on exports of petrol and diesel would remain nil.

Officials stated that there would be no change in the existing duty structure applicable to petrol and diesel meant for domestic consumption, indicating that retail fuel taxation within the country remains unchanged under the latest revision.

Windfall taxes are imposed on petroleum producers and exporters when global crude oil prices rise sharply, leading to unusually high profits. The government periodically revises these levies based on international oil prices, refining margins, and market conditions.

The latest move comes amid continued volatility in global energy markets due to geopolitical tensions and fluctuating crude oil prices.

Industry experts noted that the adjustment in export duties is aimed at balancing government revenue considerations with the operational viability of domestic refiners and exporters.

India introduced windfall taxes on crude oil producers and fuel exporters in 2022 to regulate extraordinary gains arising from global energy market disruptions.