The government has lowered the windfall tax on exports of diesel and aviation turbine fuel (ATF) effective from October 1, 2026. This decision adjusts the Special Additional Excise Duty (SAED) to ₹16 per litre for diesel and ₹10.5 per litre for ATF, down from ₹20 and ₹15 per litre respectively. The reduction reflects ongoing efforts to manage domestic petroleum product availability while responding to international price changes.
- SAED on diesel exports cut from ₹20 to ₹16 per litre.
- SAED on ATF exports reduced from ₹15 to ₹10.5 per litre.
- Duty on petrol exports remains at ₹0.5 per litre.
- No change in duty rates for petrol and diesel used domestically.
- Windfall tax rates are reviewed and adjusted every fortnight.
Why has the government reduced the windfall tax on diesel and ATF exports?
The government reviews the windfall tax on petroleum exports every two weeks to balance domestic supply needs and international market prices. The recent reduction in SAED rates for diesel and ATF exports aims to adjust to current global crude oil and refined product prices. By lowering the export duty, the government encourages exporters while still maintaining controls to ensure sufficient domestic availability.
What is the Special Additional Excise Duty (SAED)?
The Special Additional Excise Duty is a tax imposed on the export of certain petroleum products like diesel and aviation turbine fuel. It is designed to prevent excessive exports that could lead to shortages or price spikes within the country. The SAED rate is adjusted regularly based on international market conditions.
When was the windfall tax introduced on petroleum exports?
The windfall tax on diesel and ATF exports was introduced on March 27, 2026, amid rising tensions in West Asia that affected global oil prices. The levy on petrol exports was added later on May 16, 2026. Since then, the government has been revising the tax rates every fortnight to respond to changing market dynamics.
Are there any changes to domestic petroleum product taxes?
No changes have been made to the existing excise duty rates on petrol and diesel cleared for domestic consumption. The adjustments only affect the export duties to regulate overseas sales and protect domestic supply.
How does the government decide on the tax rates?
The finance ministry monitors international crude oil and refined product prices and adjusts the windfall tax rates accordingly every fortnight. This approach helps the government manage the balance between supporting exporters and ensuring affordable petroleum products for consumers within the country.
Frequently Asked Questions
Q: What is the current SAED rate on diesel exports?
A: The Special Additional Excise Duty on diesel exports has been reduced to ₹16 per litre from ₹20 per litre, effective October 1, 2026.
Q: Has the export duty on petrol changed?
A: No, the export duty on petrol remains unchanged at ₹0.5 per litre for the next fortnight.
Q: Why does the government impose a windfall tax on petroleum exports?
A: The windfall tax is imposed to ensure adequate domestic availability of petroleum products and to discourage exporters from diverting supplies overseas to benefit from higher international prices.
Q: When was the windfall tax first introduced?
A: The windfall tax on diesel and ATF exports was introduced on March 27, 2026, with the petrol export duty starting on May 16, 2026.
Q: Are domestic petrol and diesel prices affected by this tax change?
A: No, the excise duty rates on petrol and diesel for domestic consumption remain unchanged.
