India has significantly raised export duties on diesel and aviation turbine fuel in a move aimed at securing sufficient domestic supplies amid rising global oil prices. The finance ministry announced on Saturday an increase in the windfall tax on diesel exports from 21.5 rupees per litre to 55.5 rupees per litre. Similarly, the export duty on aviation turbine fuel was raised from 29.5 rupees per litre to 42 rupees per litre, with the changes taking effect immediately.
This adjustment follows last month’s government decision to reduce excise duties on petrol and diesel by 10 rupees per litre, equivalent to about $0.11, to ease the burden on consumers. Meanwhile, to curb escalating airfares, authorities have imposed a cap on the monthly increase of aviation turbine fuel prices for domestic airlines, limiting it to 25% for the month of April. This measure is particularly significant as jet fuel constitutes nearly 40% of an airline’s operating costs.
India’s energy sector is currently navigating a challenging environment as global crude oil prices have surged beyond $100 per barrel. The situation is exacerbated by restricted oil flows through the Strait of Hormuz, a critical maritime route responsible for transporting approximately 40% of India’s crude oil imports. These restrictions stem from ongoing tensions between the United States and Iran, impacting the steady supply of oil to the country.
As the world’s third-largest oil consumer and importer, and ranking among the top five refining nations globally, India remains heavily dependent on international oil markets. The recent hike in export duties reflects the government’s efforts to balance domestic fuel availability with the pressures of volatile global energy prices and geopolitical uncertainties.
