Diesel-ATF Export Duty: Amid fluctuations in international crude oil prices, the government has increased the export duty on diesel and ATF. However, fuel prices have remained unchanged.

Diesel, ATF export tax hike: Export duty on diesel and ATF hiked

Diesel-ATF Export Duty Hike: In a major decision, the central government today increased the windfall tax on diesel and ATF (air turbine fuel). The new windfall tax came into effect today, July 16. Along with increasing the export duty on diesel and aviation turbine fuel (ATF), the government also reduced the tax on petrol exports. The government's decision comes at a time when global crude oil prices are rising again amid geopolitical tensions.

New windfall tax

According to the latest notification issued by the Ministry of Finance, the export duty on petrol has been reduced from ₹4 per liter to ₹2.5 per liter. The export duty on diesel has been increased from ₹8.5 per liter to ₹15.5 per liter, and the levy on aviation turbine fuel (ATF) has been increased from ₹7.5 per liter to ₹14.5 per liter. With the change in windfall tax, the government has not made any changes to fuel prices, which remain stable across the country.

Why did the government take this decision?

The government regularly reviews the windfall tax every 15 days based on international crude oil prices. The government's goal in increasing the windfall tax is to ensure that oil companies do not sell all their fuel abroad in pursuit of profit, and that adequate stocks remain within the country. When global crude oil prices skyrocket, the margins of domestic refining companies increase significantly.

These companies generate huge profits by selling diesel and ATF abroad at exorbitant prices. If exports increase due to the greed for profit, it could lead to a fuel shortage in the country. To prevent such a situation, the government doubles the export tax to make it less profitable for companies to sell oil abroad and to ensure domestic needs are met.

Impact on ordinary consumers

Since this is a tax levied on fuel exports, it has no impact on retail petrol and diesel prices, meaning it has no direct impact on the general public.