In a move aimed at managing local supply security and capturing supernormal gains from global energy markets, the government on Monday increased the Special Additional Excise Duty (SAED), commonly known as the windfall profit tax, on the export of diesel and Aviation Turbine Fuel (ATF).
According to a notification issued by the Finance Ministry, the SAED on diesel exports has been raised to Rs 14 per litre from the existing Rs 13.5 per litre. The duty on exports of ATF has been increased to Rs 12.5 per litre from Rs 9.5 per litre.
However, there is no change in the export duty on petrol, which continues to remain at Rs 1.5 per litre. The revised rates will come into effect from June 16.
The move comes amid continued volatility in global oil markets triggered by the escalating conflict in West Asia, and ahead of a possible peace deal between and the US.
The government also clarified that there is no change in the existing excise duty rates on petrol and diesel cleared for domestic consumption, meaning retail consumers are unlikely to see any immediate impact from the latest revision.
The windfall tax regime was reintroduced on March 26 as tensions in West Asia intensified following the US-Israel attack on Iran and the subsequent retaliatory strikes. The government has since been reviewing and revising the export duties every fortnight in line with developments in international crude oil prices and refining margins. On May 16, it extended the levy to petrol exports as well.
Officials said the export duties were imposed to ensure adequate domestic availability of petroleum products at a time when geopolitical tensions have pushed up global crude oil prices. The move is aimed at discouraging excessive exports by refiners seeking to capitalise on higher international prices, thereby safeguarding domestic fuel supplies.
The government has maintained that the windfall tax mechanism helps prevent exporters from taking undue advantage of the price differential between domestic and overseas markets during periods of global supply disruptions and price spikes.
Industry experts noted that while the increase in duties on diesel and ATF exports may marginally impact the export profitability of refiners, the measure is intended to prioritise domestic energy security. India is one of the world’s largest refining hubs and exports significant quantities of petroleum products to international markets.