India Hikes Petrol Export Duty Fivefold, Cuts Diesel Levy Amidst Global Oil Volatility

In a significant move effective October 16, 2026, the Indian government has dramatically increased the export duty on petrol by five times to Rs 2.5 per litre, while simultaneously slashing the levy on diesel exports to Rs 8.5 per litre from its previous Rs 16. These contrasting adjustments are part of India's fortnightly review of its windfall tax, designed to balance fuel availability at home with global market dynamics. The re-introduction of the windfall tax regime in March 2026, after a brief withdrawal, was a direct response to surging global crude oil prices, particularly those influenced by the US-Israeli war on Iran and broader West Asia crises. The aim is to prevent Indian refiners from making excessive profits by exporting fuel when international prices are high, ensuring adequate domestic supply and energy security. Importantly, these changes strictly apply to exports and do not impact the excise duty rates on petrol and diesel sold within India, meaning no immediate change for consumers at the pump. Looking ahead, the government will continue to review these export duties every fortnight, with future revisions heavily dependent on the unpredictable swings in international crude oil and petroleum product prices. With Brent crude recently trading around $98 a barrel amidst escalating Middle East tensions and concerns over shipping routes like the Strait of Hormuz, the global energy landscape remains volatile, making these regular policy adjustments a critical tool for India's economic stability.