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Shock given by increasing tax on diesel-ATF export, reduced on petrol

Rahul Kumar | July 16, 2026 9:22 AM CST

The government has reduced the windfall tax on petrol and increased the tax on export of petrol and jet fuel.

In its latest 15-day review of windfall tax, the Indian government on Wednesday increased the windfall tax on exports of diesel and aviation turbine fuel (ATF), while cutting the tax on export of petrol. This change has come into effect from 16th July i.e. Thursday. According to the notification of the Finance Ministry, the export duty on petrol has been reduced from Rs 4 per liter to Rs 2.5 per liter.

Windfall tax on export of diesel has been increased from Rs 8.5 per liter to Rs 15.5 per liter, while tax on export of ATF has been increased from Rs 7.5 per liter to Rs 14.5 per liter. This change in windfall tax has been made amid huge fluctuations in the global oil market.

Fluctuations in crude oil prices

On Wednesday, the price of Brent crude rose almost 2 percent to a one-month high of $ 84.73 per barrel. This happened when America re-imposed the naval blockade on Iran, which increased concerns about the supply of oil through the Strait of Hormuz. This is an important route through which about 20 percent of the world's oil traveled before the conflict.

The price rise was also supported by renewed geopolitical tensions and attacks on oil tankers, although concerns about inflation and weak global demand limited further gains. The fuel market remained under pressure due to increase in diesel refining margins due to supply disruptions including lower exports from Russia.

When the Center withdrew this decision

On June 11, the Center had banned industrial, commercial and institutional customers from purchasing petrol and diesel from retail fuel stations and directed them to take supplies through bulk procurement channels. This temporary order was issued to ensure equitable availability of fuel, prevent hoarding and diversion and maintain uninterrupted supply to retail customers. Which was later withdrawn in the order of 29th June and was implemented on 1st July.

Citing the current geopolitical situation affecting the global petroleum supply chain and shipping logistics, the government said the disruptions have increased the risk of supply imbalances. Officials also observed unusually high sales of diesel and petrol at retail outlets as wholesale customers shifted their purchases from dedicated supply channels to retail pumps due to widening price differentials.

Restrictions were in effect for 90 days

At that time, the retail diesel price in Delhi was Rs 95.20 per litre, while wholesale buyers were paying Rs 134.50 per litre. This gap arose when state oil marketing companies controlled retail fuel prices to protect ordinary customers from higher costs resulting from the West Asia conflict, while wholesale customers continued to pay market-linked rates.

Under this order, the sale of diesel at retail outlets has been limited to vehicles' fuel tanks or containers approved by the Petroleum and Explosives Safety Organization (PESO). Also, a limit of purchasing 200 liters of diesel per day for each customer or vehicle has been fixed. These restrictions can remain in force for 90 days and can also be extended by a new order of the government. Violation of the rules may result in punishment under the 'Essential Commodities Act'.

Saurabh Sharma

Covering stock market, economy and commodities for 15 years. Before joining TV9, he was also associated with many big organizations like DNA, A-Shiyanet, Jansatta and Rajasthan Patrika.