The Indian government has announced a significant reduction in the windfall tax on exports of petrol, diesel, and aviation turbine fuel (ATF), effective from June 1, 2026. This move is aimed at providing relief to oil companies and boosting exports.
Revised Tax Rates
According to a government notification, the windfall tax on petrol exports has been slashed to zero from the earlier rate of Re 0.50 per litre. The tax on diesel exports has been reduced to Re 0.50 per litre from Re 1.50 per litre. Similarly, the tax on ATF exports has been cut to Re 1 per litre from Re 2 per litre.
Impact on Oil Companies
This reduction is expected to benefit major oil refiners and exporters such as Reliance Industries, Nayara Energy, and others. The windfall tax was introduced in July 2022 to capture extraordinary profits of oil companies due to high global crude prices. However, with the recent moderation in crude prices, the government has decided to lower the levy.
Market Reaction
The announcement is likely to boost the margins of oil marketing companies and encourage higher exports. Shares of oil refiners are expected to react positively in the upcoming trading sessions. The government reviews the windfall tax every fortnight based on international crude oil prices.
This decision comes as part of the government's ongoing efforts to balance the interests of consumers and producers while ensuring sufficient domestic supply of petroleum products.
