Centre Raises Windfall Tax On Petrol, Diesel Exports, Cuts Levy On Jet Fuel

(MENAFN- Live Mint) The government on Tuesday raised the windfall tax on exports of petrol and diesel by ₹1.5 and ₹1 respectively, and reduced it by 50 paise per litre on jet fuel exports for the next fortnight.

Often called a windfall tax, the special additional excise duty (SAED) aims to disincentivize petro-product exports and stabilize domestic supply, as well as capture a share of supernormal profits made by petroleum companies.

With the latest revision, overall export duty on diesel stands at ₹25 per litre and petrol at ₹1.5 per litre. The SAED on the export of aviation turbine fuel (ATF ) exports will be ₹19 per litre for the next fortnight, a gazette notification said.

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The rates are revised every fortnight based on the average international prices of crude oil, petrol, diesel and ATF during the period since the last review.

In the past two weeks, crude oil prices have increased by around 4%. Around 8.30 pm, the November contract of the benchmark Brent crude on the Intercontinental Exchange was trading at $92.11 per barrel, 1.89% above its previous close.

War-led levy

When the government last imposed windfall levies on 27 March, with export duties on diesel at ₹21.5 a litre and on ATF at ₹29.5 a litre, it estimated revenue collection of about ₹1,500 crore in two weeks. These levies were first imposed in 2022 during the peak of the Russia-Ukraine war and were withdrawn in 2024.

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The war in West Asia and the closure of the Strait of Hormu have squeezed global oil supplies and raised prices. Prior to the war, the strait was a key channel for about 20% of global oil and gas supplies. The blockade of the strait-first imposed by Iran after the war began in late February, followed by a US naval blockade in April-severely disrupted global energy flows.

With the world's fourth-largest refining capacity of 258 million tonnes, India is also witnessing record growth in domestic petroleum product consumption. In FY26, India's petroleum product consumption touched a high of 243 million tonnes.

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