India Raises Export Duty On Petrol, Diesel And ATF, Keeps Domestic Rates Unchanged

New Delhi: The Ministry of Finance has announced an increase in the Special Additional Excise Duty (SAED) on exported petroleum products, with revised rates set to come into effect from May 16. The notification, issued through the official gazette on May 15, adjusted the levy on petrol, diesel and Aviation Turbine Fuel (ATF) while keeping domestic fuel duties unchanged.

According to the new notification, the exporters will pay Rs 3 per litre on petrol, Rs 16.50 per litre on diesel, and Rs 16 per litre on ATF. At the same time, the Road and Infrastructure Cess on these products has been reduced to nil. The officials stated that the changes are intended to recalibrate export levies to reflect current market conditions without altering the cost of fuel for domestic consumers.

The government stressed that the excise duties on petrol and diesel sold within India will remain at existing levels, meaning there should be no immediate impact on retail pump prices. As per reports, by focusing the hike on exports, the decision seeks to capture additional revenue from overseas sales while maintaining price stability at home.

Revised Export Levies Announced In Gazette Notification

As per the officials, the updated duties were made public through a gazette notification on Friday, with implementation scheduled for the following day. The Special Additional Excise Duty applies only to consignments sent abroad and does not affect supplies for the domestic market.

The Finance Ministry officials explained that the revision is part of a calibrated approach to manage petroleum taxation. The decision to bring RIC down to zero on these products accompanies the hike in SAED, ensuring the overall tax burden on exports is adjusted in a targeted manner.

Domestic Fuel Prices Shielded From Change

An important feature of the notification is that it leaves domestic excise duties untouched. The petrol and diesel meant for local consumption will continue to be taxed at the current rates, so consumers are unlikely to see any change at fuel stations in the near term.

The government said that the differential taxation approach is designed to raise additional resources from petroleum exports while insulating the domestic market from volatility. By keeping internal duties stable, the government hopes to balance revenue generation with the need to avoid inflationary pressure on households and businesses.

Revenue Focus Without Impacting Retail Market

The higher export duties are expected to boost government receipts from petroleum shipments at a time when global energy prices remain volatile. The concerned officials noted that the measure allows India to benefit from overseas demand without passing the cost on to Indian consumers.

The analysts viewed the move as a continuation of the government’s strategy of using export levies as a flexible tool to manage fiscal needs. With domestic excise unchanged, the focus remains on ensuring that fuel remains affordable for Indian users even as export taxation is adjusted.