Fuel Export Levies Revised: Diesel Levy Cut, Petrol Levy Raised, ATF Unchanged
The Centre revised the "windfall" export levies on fuel that Indian refineries sell abroad, effective 16 October 2026. The new rates apply for the next fortnight (two weeks).
The levy on diesel exports was cut to ₹8.50 per litre from ₹16 per litre.
The levy on petrol exports was raised to ₹2.50 per litre from ₹0.50 per litre, a fivefold increase.
The levy on aviation turbine fuel (ATF, or jet fuel) exports was kept unchanged at ₹10.50 per litre.
The levy is charged as Special Additional Excise Duty (SAED), together with the road and infrastructure cess on diesel. Taxes on petrol and diesel sold inside India did not change.
The rates are reset every two weeks based on average international prices of crude oil and fuels. A lower diesel levy usually means the extra profit (margin) refiners earn on diesel abroad has come down; a higher petrol levy means the petrol margin has gone up.
Windfall Tax and Special Additional Excise Duty (SAED)
A windfall tax is an extra tax on sudden profits that a company earns because of luck, such as a war that pushes up world oil prices, and not because of its own effort. In India, the windfall tax on fuel is collected as Special Additional Excise Duty (SAED), a fixed amount per litre charged on petrol, diesel and ATF when they are cleared for export. It also makes exporting less attractive, so that more fuel stays inside India.
The fortnightly review is the SAED system at work. Because diesel margins abroad fell, the government cut the diesel levy by almost half. Because petrol margins rose, it raised the petrol levy, so the state shares in that extra gain.
Gross Refining Margins (GRM) and India's Refining Sector
A refinery is a giant factory that turns crude oil (the thick black oil pumped from the ground) into products we use, like petrol, diesel, jet fuel and cooking gas. The Gross Refining Margin (GRM) is the money a refinery earns on each barrel of crude it processes. It equals the total value of all the products made from one barrel, minus the cost of that barrel of crude. It is usually shown in US dollars per barrel (one barrel is about 159 litres).
The windfall export levy is set every two weeks to track refining margins on each fuel. The sharp cut in the diesel levy points to a fall in diesel cracks, while the jump in the petrol levy points to a rise in petrol cracks. So the levy changes are a direct signal of how the GRM on each fuel has moved.
- Effective date of revised rates: 16 October 2026 (valid for the next fortnight)
- Diesel export levy: ₹8.50 per litre (from ₹16 per litre)
- Petrol export levy: ₹2.50 per litre (from ₹0.50 per litre)
- ATF export levy: unchanged at ₹10.50 per litre
- Levy charged as Special Additional Excise Duty (SAED), with road and infrastructure cess on diesel
- No change in duties on petrol and diesel sold in India
- Export levies reintroduced on 27 March 2026; earlier windfall tax ran from 1 July 2022 to 2 December 2024
- India's crude import dependence: about 88.2% (2024-25)