The Central Government has increased the windfall tax on exports of diesel and aviation turbine fuel (ATF) with effect from June 16. The export duty on diesel has been raised to Rs 14 per litre from Rs 13.5 per litre, while the levy on ATF has been increased to Rs 12.5 per litre from Rs 9.5 per litre. There is no change in the export duty on petrol, which remains at Rs 1.5 per litre.
Geopolitical Context
The move comes amid rising geopolitical tensions in the Middle East and concerns over global crude oil prices. The government says the measure is aimed at ensuring adequate domestic fuel availability and preventing exporters from benefiting excessively from international price spikes.
Impact on Domestic Market
By increasing export duties, the government aims to discourage exports and keep more fuel within the country, thereby stabilizing domestic prices. The decision reflects a proactive approach to shield the Indian economy from external shocks.
The unchanged duty on petrol suggests that the government sees less need to intervene in that segment. However, analysts expect that if crude prices continue to rise, further measures may be introduced.
