The central government has made significant changes to the export duties (Windfall Tax) on gasoline, diesel fuel, and aviation turbine fuel (ATF). These new rates will take effect during the next two-week session starting September 16. The government reviews these rates every two weeks.
According to a notification issued by the Ministry of Finance, the export duty on diesel fuel was reduced from 25 to 20 rupees per liter. Additionally, the tax on ATF exports was lowered from 19 to 15 rupees per liter. The duty on gasoline exports was also significantly reduced, decreasing from 1.50 rupees to 50 cents per liter.
It is important to note that the government clarified that the current tax rates for gasoline and diesel fuel intended for the domestic market remain unchanged; this reduction applies exclusively to taxes on the export of these fuels.
The Windfall Tax is an additional tax levied on companies that have received suddenly or unusually high profits. In the case of petroleum products, the government introduced this tax during a period of sharp growth in global crude oil and petroleum product prices. The government's goal was to prevent excessive export of petroleum products by oil companies due to high international market prices, thereby ensuring the availability of these products within the country.
This export tax on diesel fuel and ATF was introduced by the government on March 27, 2026, against the backdrop of escalating tensions in the Middle East. Since then, the rates have been adjusted every two weeks. The tax on gasoline exports came into force on May 16. The government adopted this measure to maintain an adequate supply of petroleum products in the domestic market and to reduce the likelihood that companies would over-export products by exploiting the difference between international and domestic prices.
The most direct benefit from the reduction of the Windfall Tax will go to companies engaged in the export of petroleum products. These companies will now pay a lower tax when selling gasoline, diesel fuel, and ATF abroad compared to previous rates. This will lead to a reduction in their export costs and a decrease in the tax burden on profits from the sale of these products on the international market. The government implemented this reduction during a period when attention remains focused on fuel prices and availability in the global market amid tensions in the Middle East.
The main objective of the Windfall Tax was to ensure an adequate supply of petroleum products in the domestic market and to prevent large-scale exports based on realizing the full benefit of high international prices. Now that the government has reduced the export tax burden, the current tax rates for domestic gasoline and diesel fuel remain the same. Although this adjustment is not expected to provide immediate direct benefits to domestic consumers, the export business may become more attractive to companies, which could affect their profits and prompt them to change their sales strategy in line with world market prices.
