Diesel levy cut, but will pump prices fall? Here’s what it means for motorists

New Delhi: The Central Government has reduced export levies on diesel and aviation turbine fuel (ATF) for the second consecutive fortnight, lowering the levy on diesel to Rs 16 per litre and that on ATF to Rs 10.5 per litre from October 1, according to notifications issued by the Ministry of Finance.

The diesel export levy has been cut by Rs 4 per litre from the Rs 20 per litre rate applicable during the previous fortnight, while the levy on ATF has been reduced by Rs 4.5 per litre from Rs 15 per litre. The export levy on petrol remains unchanged at Rs 0.5 per litre.

Since September 1, the diesel export levy has been reduced by Rs 9 per litre to Rs 16 per litre, while the levy on ATF has fallen by Rs 8.5 per litre to Rs 10.5 per litre.

The latest notifications amend the government's March 26 notifications governing the export levies, with the revised rates coming into effect from October 1, 2026.

The export levies on petrol, diesel and ATF were introduced from March 27, 2026, to discourage exports and support domestic availability of petroleum products amid the West Asia crisis.

The rates are reviewed every fortnight based on average international prices of crude oil, petrol, diesel and ATF during the period since the previous review.

The latest reduction continues the government's fortnightly review and adjustment of export levies. The next rates will be determined through the same review mechanism, taking into account prevailing international prices of petroleum products.

There is no change in the existing excise duty rates on petrol and diesel cleared for domestic consumption, according to the explanation accompanying the notification.

The government had last revised the export levies with effect from September 16, when the diesel duty was reduced to Rs 20 per litre, ATF to Rs 15 per litre and petrol to Rs 0.5 per litre.

Will petrol and diesel prices fall in India?

The reduction in export levies on diesel and ATF does not automatically translate into lower petrol or diesel prices at Indian fuel pumps. The latest move concerns the levies imposed on petroleum products being exported, while the existing excise duty rates on petrol and diesel cleared for domestic consumption remain unchanged. As a result, motorists should not expect an immediate reduction in retail fuel prices solely because of the October 1 export-levy revision.