India levies export duty on diesel, ATF to secure domestic supply

India has imposed additional export duties on diesel and aviation turbine fuel (ATF), in a move aimed at ensuring adequate domestic supply. According to an official notification, an additional duty of ₹21.5 per litre has been levied on diesel exports and ₹29.5 per litre on ATF exports.

Finance Minister Nirmala Sitharaman said the duties were imposed to ensure sufficient availability of these fuels for domestic consumption, adding that Parliament has been informed of the decision.

India is a net exporter of ATF, and the move is seen as strategic, particularly against the backdrop of ongoing tensions in West Asia that have tightened global energy markets.

Globally, ATF prices have surged over 105% since February, prompting Indian refiners to prioritise exports to capitalise on higher international margins compared with domestic sales.

Indian oil marketing companies (OMCs) typically import crude oil and refine it into products such as diesel and ATF.

The new export duties are expected to discourage excessive export-driven profiteering during a period of global supply uncertainty while safeguarding domestic availability.

Petroleum Minister Hardeep Singh Puri said the government has already absorbed a significant fiscal burden to shield consumers from high global prices.

He noted that excise duties on petrol have been cut to ₹3 per litre from ₹13 earlier, while excise duty on diesel has been reduced to zero from ₹10. Despite these cuts, oil companies continue to face losses of around ₹24 per litre on petrol and ₹30 per litre on diesel due to elevated international prices.

Puri added that the export tax ensures that refiners exporting fuel during a period of high global prices contribute to the domestic balance, rather than fully benefiting from overseas demand.