Centre slashes fuel export levies: Petrol duty cut to ₹0.50/litre, diesel to ₹20, ATF to ₹15

The government has slashed the export duty across the board on petrol, diesel and aviation turbine fuel (ATF) in its latest fortnightly review, according to a late notification on Wednesday, September 16, 2026.

Effective from September 16, the export levy on petrol will be ₹0.50 per litre, on diesel ₹20 per litre, and on ATF ₹15 per litre. In the previous fortnightly review, the government had fixed the levy at ₹1.5 for every litre of petrol, diesel at ₹24 per litre and ATF at ₹19 per litre.

The excise duty rates on petrol and diesel for domestic consumption remain unchanged. Excise duty is a central tax on the manufacture or production of goods, and for fuels it forms a significant part of the final retail price. Keeping these rates unchanged means the central tax on domestic petrol and diesel is the same as before.

Export duty is a tax on goods shipped out of the country. By adjusting this levy, the government can influence the balance between exporting refined fuels and keeping them for domestic use. A higher export duty makes overseas sales less attractive, while a lower duty reduces that disincentive. The latest revision lowers the duty on all three fuels.

The government has been conducting a fortnightly review of export levies since March 27, in the context of the conflict in West Asia. The stated aim is to ensure domestic availability of retail fuels by disincentivising exports. The fortnightly cycle allows the government to respond to changes in global energy markets and domestic supply conditions.

Petrol and diesel are used in transport, agriculture, industry and power generation. ATF is used by airlines. Changes in export duty on these fuels can affect the export volumes of refiners, their domestic sales, and the overall supply situation in the country.

In the latest review, the reduction is across all three fuels. Petrol export duty has come down from ₹1.5 per litre to ₹0.50 per litre. Diesel export duty has fallen from ₹24 per litre to ₹20 per litre. ATF export duty has been reduced from ₹19 per litre to ₹15 per litre. All changes take effect from September 16, 2026.

The notification was issued late on Wednesday, and the new rates apply immediately. The government has not announced any change to the excise duty on domestic petrol and diesel.

Export duties on fuels are a flexible policy tool that can be reviewed every fortnight. They allow the government to balance domestic supply requirements with the export earnings of refineries. When domestic supply is tight, a higher export duty can help retain more fuel within the country. When supply conditions are comfortable, a lower duty can allow more exports.

The latest cut means the levy on exports is lower than in the previous fortnight, but exports remain subject to duty. The government will continue to review the situation every fortnight.

For consumers, the immediate impact of the export duty change is indirect. The excise duty on domestic petrol and diesel is unchanged, so the central tax component of retail fuel prices remains the same. Retail prices also depend on international crude oil prices, refining costs, dealer commissions and state-level taxes. The export duty changes are primarily aimed at the refining and export sector.

The fortnightly reviews, which began on March 27, are part of the government’s efforts to manage fuel supplies amid the conflict in West Asia. The conflict has the potential to disrupt global energy supplies and shipping routes, making it important for India to monitor both domestic availability and export flows. The latest notification is the most recent step in that process.