A sudden spike in international crude oil prices is now reshaping how India taxes its fuel exports. The government has sharply raised the windfall tax on the export of diesel and aviation turbine fuel, better known as jet fuel, by 7 rupees a litre. Notably, at the same time it has trimmed the duty charged on petrol exports.
How the Duty Changes on Each Fuel
According to the official notification, the export duty on diesel has been increased from 8.5 rupees a litre to 15.5 rupees a litre. Likewise, the tax on aviation turbine fuel exports has gone up from 7.5 rupees a litre to 14.5 rupees a litre. In the opposite direction, the duty on petrol exports has been cut from 4 rupees a litre to 2.5 rupees a litre. These revised rates come into force from today, 16 July.
Why the Government Made This Move
The decision is rooted in rising tensions between the United States and Iran. As friction between the two countries intensified this week, global oil prices climbed sharply. On Wednesday prices first rose and then eased slightly, after US President Donald Trump reimposed a naval blockade on all of Iran's ports and Iran struck back at American infrastructure in the region. With crude prices moving higher against this backdrop, the government chose to raise the windfall tax on diesel and jet fuel exports.
