Govt scraps export duty on petrol; hikes levies on diesel, ATF — check details here

Meanwhile, the levies on diesel and aviation turbine fuel (ATF) have been increased.The revised rates are as follows:Petrol: Export duty has been scrapped, down from ₹2.50 per litre.Diesel: Export levy has been hiked to ₹11.50 per litre from ₹8.50 per litre.ATF: Export duty has been raised to ₹11 per litre from ₹10.50 per litre.The rate of special additional excise duty (SAED), along with road and infrastructure cess on export of diesel, will now be ₹11.5 a litre from ₹8.5 a litre.Why were the additional duties levied?The government first imposed export duties on diesel and ATF on March 27, with rates revised every fortnight amid escalating tensions in West Asia.

The conflict began nearly nine months ago, when the United States and Israel launched coordinated military strikes against Iran.These geopolitical tensions in West Asia disrupted crude oil supplies and pushed international prices higher. Subsequently, from May 16, the government also imposed an export levy on petrol.The windfall tax was introduced to increase domestic availability of the fuel amid the war in West Asia.

It was also aimed at preventing exporters from benefiting disproportionately from the price difference, as global crude oil prices surged following the outbreak of the conflict.India's dependence on oil suppliesIndia remains significantly exposed to disruptions in West Asia, given its dependence on the region for crude oil supplies. Before the conflict began, nearly half of the country's crude oil imports passed through the Strait of Hormuz, a key shipping route connecting the Persian Gulf to international markets.Disruptions to commercial shipping through the Strait forced India to diversify its crude oil sources while managing additional supply risks.While West Asia has historically supplied the bulk of India's crude, Russia’s share expanded significantly during the conflict.

Between March and June 2026, Russia accounted for 39% of India’s crude imports, up from 32% in the year-ago period, according to an earlier Mint report.Supplies from Saudi Arabia were disrupted as the key shipping route from the Gulf, the Strait of Hormuz, was shut. Further, the share of Iraq, a key supplier to India, declined sharply from 18% to 3%. Meanwhile, several countries' share in India’s crude import basket enhanced, notably Iran and Venezuela, both of which involved a tacit nod from the US for India to increase crude purchases.(with inputs from PTI)