The Indian government on Thursday rolled back its recently imposed export duties on petrol, diesel, and aviation turbine fuel, marking a sharp policy U-turn just days after the higher rates were introduced. The revised export levy structure came into effect from September 16.
Under the new framework, the export duty on petrol has been slashed by one rupee per litre, bringing it down to fifty paise per litre. Diesel saw an even steeper reduction — the export levy was cut by five rupees per litre, falling to twenty rupees per litre. While the exact revised rate for aviation turbine fuel was not separately detailed in official notifications, sources confirm that export duties on this product were also lowered as part of the same revision.
The move effectively undoes the steeper export taxes that the government had imposed earlier this month, which had been designed to curb outflows of refined petroleum products and protect domestic supply. Officials now appear to be reassessing the impact of those duties on India's refining sector, which accounts for a significant share of the country's export earnings.
Analysts say the reversal reflects concerns that the higher levies could squeeze refinery margins and push some shipments away from Indian ports toward rival export destinations in Southeast Asia and Europe. India is one of the world's largest refiners of crude oil, and sustained export competitiveness is seen as critical to maintaining the sector's profitability.
The government had justified the original tax hike as a measure to ensure adequate domestic availability of fuels and to insulate Indian consumers from global price volatility. However, refinery operators had flagged that the duties risked making Indian products uncompetitive in international markets, potentially leading to idle capacity and job losses in the sector.
Market participants welcomed the move, noting that the revised rates bring India's export duties closer to pre-announcement levels and reduce uncertainty for traders and refiners alike. The change is expected to take immediate effect on export consignments cleared from September 16 onwards.
