India cuts fuel duty on petrol & diesel, imposes export levy on diesel, ATF

Ministers say decision aims to cushion consumers and support oil marketing companies as crude prices surge amid Iran War

The government has cut the excise duty on petrol and diesel by ₹10 per litre each to help oil marketing companies (OMCs) manage high crude prices. It also imposed an export duty of ₹21.5 per litre on diesel and ₹29.5 per litre on aviation turbine fuel (ATF) to ensure domestic supply.

 

Global benchmark Brent crude has risen by more than 50 per cent to around $110 per barrel since the start of the Iran war on February 28, amid disruptions to energy infrastructure and shipping routes, including the Strait of Hormuz.

 

“In view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced by ₹10 per litre each. This will provide protection to consumers from a rise in prices," Finance Minister Nirmala Sitharaman said in a social media post.

 

 

Export duties on diesel and ATF aim to ensure adequate availability for domestic consumption, she said, adding that Parliament has been notified about the decision.

 

Hardeep Singh Puri, Minister of Petroleum and Natural Gas, separately said that international crude prices have increased from $70 per barrel to around $122 per barrel in one month.

 

Petrol and diesel prices “have increased by around 30-50 per cent in South East Asian countries, 30 per cent in North American countries, 20 per cent in Europe and 50 per cent in African countries. The Modi government had two choices: Either increase prices drastically for citizens as all other nations have done or bear the brunt on its finances so that citizens are insulated from international volatility,” he said.

 

He said the government opted to absorb the loss in its tax revenues, even as OMCs face losses of around ₹24 per litre for petrol and ₹30 per litre for diesel at current price levels.

 

Escalating tensions in West Asia have heightened risks for India’s trade and energy security. The region accounts for about 14–20 per cent of India’s trade, and disruptions can widen the current account deficit, raise inflation and dampen consumption.

 

Experts estimate that crude prices at $100-105 per barrel translate into an impact of around ₹11 per litre on petrol marketing margins and ₹14 per litre on diesel.