The government on Monday increased the Special Additional Excise Duty (SAED), commonly known as the windfall profit tax, on exports of diesel and Aviation Turbine Fuel (ATF) in a move aimed at ensuring domestic energy security and capturing gains arising from elevated global fuel prices.

According to a notification issued by the Finance Ministry, the export duty on diesel has been raised to Rs 14 per litre from Rs 13.5 per litre, while the levy on Aviation Turbine Fuel has been increased to Rs 12.5 per litre from Rs 9.5 per litre.

The revised rates will come into effect from June 16.

Petrol Export Duty Unchanged

There has been no change in the export duty on petrol, which continues to remain at Rs 1.5 per litre.

The government also clarified that excise duty rates on petrol and diesel meant for domestic consumption remain unchanged, indicating that retail consumers are unlikely to witness any immediate impact on fuel prices.

The latest revision comes at a time when global oil markets continue to experience volatility amid heightened tensions in West Asia and ahead of a possible agreement between Iran and the United States.

Windfall Tax Reviewed Every Fortnight

The windfall tax regime was reintroduced on March 26 after the escalation of hostilities involving Iran, Israel and the United States led to concerns over global energy supplies and rising crude prices.

Since then, the government has been reviewing export duties every fortnight based on movements in international crude oil prices and refining margins.

On May 16, the levy was extended to petrol exports as well.

Officials said the objective of the duties is to discourage excessive exports by refiners seeking to benefit from higher international prices and to ensure adequate domestic availability of petroleum products.

Focus On Domestic Energy Security

According to the government, the windfall tax mechanism prevents exporters from taking disproportionate advantage of the gap between domestic and overseas fuel prices during periods of global disruptions and price spikes.

Industry experts said the higher duties on diesel and ATF exports may slightly affect the export profitability of refiners.

However, they noted that the move is intended to prioritise domestic fuel supplies and strengthen India’s energy security at a time of uncertainty in international markets.

India is among the world’s largest refining centres and exports substantial quantities of petroleum products to several countries. With geopolitical developments continuing to influence crude prices, the government is expected to maintain close oversight of the sector and adjust duties in line with changing market conditions.

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