New Delhi: The Government of India has announced a sharp reduction in special additional excise duties on petrol and diesel, while simultaneously introducing a new levy on Aviation Turbine Fuel (ATF), as part of its latest fuel pricing measures.

The revised rates came into effect from March 26, 2026, according to official notifications.

Excise duty slashed on petrol and diesel

Under the new structure:

Petrol excise duty has been reduced to ₹3 per litre, down from ₹13

Diesel excise duty has been cut to zero, from ₹10 per litre

The move is expected to provide relief to consumers and transport sectors, as lower duties may lead to a drop in retail fuel prices.

According to the Gazetta notification. "In exercise of the powers conferred by section 5A of the Central Excise Act, 1944 (1 of 1944) read with section 147 of Finance Act, 2002 (20 of 2002), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 05/2019-Central Excise, dated the 6th July, 2019, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section(i), vide number G.S.R. 488(E), dated the 6th July, 2019, namely; In the said notification, I. in the Table, (i) against Sl. No. 1, in column (4), for the entry, the entry "Rs. 3 per litre" shall be substituted, (ii) against Sl. No. 2, in column (4), for the entry, the entry "Nil" shall be substituted."

New excise duty on Aviation Turbine Fuel

At the same time, the Centre has imposed a Special Additional Excise Duty on Aviation Turbine Fuel (ATF).

The base duty has been introduced with effective taxation at ₹29.5 per litre after exemptions. This marks a major policy shift, bringing aviation fuel under a revised tax framework.

What it means for consumers

Consumers may soon see lower petrol and diesel prices, depending on how oil marketing companies pass on the benefits.

However, the aviation sector may face cost pressures, which could indirectly impact air travel costs in the coming weeks.