India's government has announced revised windfall tax rates on fuel exports, effective from June 1, 2026. The new rates reimpose levies on diesel and aviation turbine fuel (ATF) after a period of nil taxes, and introduce a new duty on petrol exports. The changes are based on fluctuations in global oil prices.
According to the official notification, the windfall tax on diesel exports will be set at ₹2 per liter, while ATF exports will attract a tax of ₹1.50 per liter. Petrol exports will be taxed at ₹1 per liter. These rates are subject to periodic review every fortnight based on the average crude oil price.
The windfall tax was first introduced in July 2022 to capture excess profits of oil refiners when global crude prices surged. The government has adjusted the rates regularly, sometimes reducing them to zero when margins narrowed. The latest revision reflects a recent uptick in global oil prices, which have risen due to supply concerns and geopolitical tensions.
Industry experts say the reimposition of taxes could impact refining margins for companies like Reliance Industries and Nayara Energy, which export a significant portion of their fuel output. However, the government aims to balance revenue generation with ensuring adequate domestic fuel supply.
The revised taxes come as India continues to navigate volatile energy markets, with crude oil prices hovering around $85 per barrel in May 2026. The government will review the rates again on June 15, 2026.
