Petrol export tax cut to Rs 1.5/Litre, diesel to Rs 13.5: New windfall tax rates from June 1

The Centre has announced fresh windfall tax rates on fuel exports, reducing the levy on petrol, diesel and aviation turbine fuel (ATF) with effect from June 1, 2026.

Under the revised rates notified by the Ministry of Finance, the windfall gains tax on petrol exports has been cut to Rs 1.5 per litre from Rs 3 per litre. The tax on diesel exports has been reduced to Rs 13.5 per litre from Rs 16.5 per litre, while the levy on ATF exports has been lowered to Rs 9.5 per litre from Rs 16 per litre.

There is no change in excise duty on petrol and diesel meant for domestic consumption, meaning the revision does not affect fuel prices at retail pumps.

What are the new windfall tax rates from June 1?

The revised export tax rates are:

• Petrol: Rs 1.5 per litre (down from Rs 3)
• Diesel: Rs 13.5 per litre (down from Rs 16.5)
• Aviation Turbine Fuel (ATF): Rs 9.5 per litre (down from Rs 16)

The new rates will come into force from June 1.

Why has the government reduced the tax?

The revision follows the government's fortnightly review of international crude oil and fuel prices. Windfall tax rates are linked to movements in global markets and are adjusted periodically based on average prices of crude oil, petrol, diesel and ATF.

The latest review comes at a time when global crude oil prices have surged amid the ongoing US-Iran conflict. Supply concerns and disruptions around the Strait of Hormuz have increased pressure on oil markets, prompting a fresh reassessment of export levies.

The windfall tax mechanism is used to regulate extraordinary gains earned by exporters when international fuel prices rise significantly above domestic levels. The previous revision of these rates had come into effect on May 16.