India hikes windfall tax on petrol, diesel and ATF exports from 3 August — Here's all you need to know
The Indian government has today increased windfall tax on petrol exports to ₹3.5 per litre from ₹2.5 per litre — up by ₹1 per litre
The Indian government has today increased windfall tax on petrol exports to ₹3.5 per litre from ₹2.5 per litre — up by ₹1 per litre, effective from 3 August 2026, according to an official order. Further, the Centre has also hiked windfall tax on diesel exports to ₹24 per litre from ₹15.5 per litre — up by ₹8.5 per litre, effective from 3 August 2026, it added, cited a government order on the same. For air turbine fuel (ATF) also known as jet fuel, the government has raised windfall tax on exports to ₹22 per litre from ₹14.5 per litre — up by ₹7.5 per litre, effective from today, it said. The latest revision comes even as global oil prices fell on Monday after US President Donald Trump signalled preparations for fresh talks with Iran. Although Tehran denied that negotiations were under way, Brent crude retreated sharply, highlighting how developments in the Middle East continue to influence India's energy policy.
Why India reviews windfall taxes every fortnight The Centre reviews windfall taxes on petroleum products every two weeks, adjusting the levies in response to movements in international crude prices, export margins and broader market conditions. Windfall taxes are designed to capture extraordinary profits earned by refiners and producers when global energy prices surge. The policy also seeks to discourage excessive exports during periods of supply uncertainty and ensure sufficient fuel remains available for domestic consumption. The backdrop: Strait of Hormuz disruption and earlier tax changes The latest increase follows a major policy shift announced on 27 March, when the government reduced excise duties on petrol and diesel while simultaneously reintroducing windfall taxes on exports of refined diesel and jet fuel. At the time, the government cited supply disruptions caused by the effective closure of the Strait of Hormuz amid the conflict in West Asia.
The measures were intended to shield Indian consumers from rising fuel prices while safeguarding domestic supplies. Under those changes, the special additional excise duty on petrol was cut to ₹3 per litre from ₹13 per litre, while the duty on diesel was reduced to nil from ₹10 per litre. The government also imposed windfall duties of ₹21.5 per litre on diesel exports and ₹29.5 per litre on ATF exports. Those export levies marked the return of a tax last used during the Russia-Ukraine war in 2022 before being withdrawn in 2024. Officials estimated that the combined reduction in excise duties and export tax measures would result in a revenue impact of around ₹5,500 crore every fortnight. Oil prices tumble as markets react to possible US-Iran talks Global crude prices fell sharply on Monday (3 August) after Trump said the United States was preparing for another round of talks with Iran aimed at ending the conflict in the Middle East.
The BriefWire