The Indian government has significantly increased the windfall tax on diesel and aviation turbine fuel (ATF) exports, effective immediately, aiming to bolster domestic fuel supply and mitigate the impact of volatile global crude oil prices.
Photograph: Mansi Thapliyal/Reuters
Key Points
- The Indian government has raised the export duty on diesel to Rs 55.5 per litre and on aviation turbine fuel (ATF) to Rs 42 per litre, effective immediately.
- This marks an increase from the previous duties of Rs 21.50 a litre on diesel and Rs 29.5 per litre on ATF, which were imposed on March 26.
- The duties are intended to enhance domestic fuel availability and prevent exporters from capitalising on global crude oil price surges, particularly in the context of the West Asia conflict.
- Export duty on petrol remains unchanged at nil.
- The move follows a period of significant disruption in the global energy market due to geopolitical tensions.
and on aviation fuel ATF to Rs 42 a litre.
Immediate Effect and Rationale
The duty hikes would be applicable with immediate effect, the finance ministry said in a notification.
The government had, on March 26, imposed an export duty of Rs 21.50 a litre on diesel, and Rs 29.5 per litre on Aviation Turbine Fuel (ATF).
The duties were levied to increase domestic availability of the fuel amid the war in West Asia.
They were also aimed at not allowing exporters to take undue advantage due to price differences, as globally crude oil prices had risen since the beginning of the war.
Geopolitical Context
On February 28, the United States and Israel launched military strikes against Iran, triggering sweeping retaliation from Tehran.
On April 8, Iran, the United States and Israel agreed on a two-week ceasefire in the war that tore across the Middle East and disrupted the global energy market.
Export duty on petrol continues to remain nil.
