India sharply increased export duties on diesel and aviation fuel as it moves to shore up revenues and manage domestic fuel dynamics amid ongoing global energy disruptions.
According to an official notification published in the government gazette, the export tax on diesel has been more than doubled to 55.5 rupees ($0.60) per litre, up from 21.5 rupees previously. Duties on aviation turbine fuel were also raised to 42 rupees per litre from 29.5 rupees, while the export tax on gasoline remains unchanged.
The decision comes at a time when global energy markets are under pressure due to geopolitical tensions in the Middle East, which have heightened volatility in oil prices and disrupted supply chains.
India, the world’s third-largest economy in Asia, imports nearly 90% of its crude oil needs, making it particularly sensitive to fluctuations in global energy markets.
Officials said the move is intended to boost government revenue while preventing exporters from benefiting disproportionately from relatively lower domestic fuel prices. The higher duties could also discourage refiners from exporting, thereby increasing local fuel availability and strengthening domestic inventories.
A finance ministry official noted that the policy adjustment is designed to balance fiscal needs with energy security concerns, particularly as rising crude prices place additional strain on both consumers and industries.
The tax hike is expected to have ripple effects across the refining sector, potentially influencing export volumes and profit margins for Indian oil companies.
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