Revised export duty on fuel kicks in from June 1; Domestic excise rates on petrol, diesel remain unchanged

India has slashed its Special Additional Excise Duty (SAED), colloquially known as the windfall tax, on domestically produced crude oil to INR 4,800 per tonne, down from INR 5,600, effective June 1. This move, aimed at aligning with recent dips in international crude prices, simultaneously confirms that export duties on refined fuels like petrol, diesel, and Aviation Turbine Fuel (ATF) will remain at zero, providing continued relief to Indian refiners. The Ministry of Finance fortnightly review underscores a dual strategy: adjusting domestic crude levies while maintaining a competitive edge for refined product exports. This policy comes as global energy markets continue to navigate volatility, influenced by a complex interplay of supply dynamics and demand shifts, exacerbated by the lingering West Asia crisis. While the nil export duty supports major Indian oil refiners in capitalizing on international demand, the unchanged Central Excise Duty on domestic petrol and diesel shores up government revenue without immediately burdening local consumers. The decision signals the government's intent to balance national fiscal health with support for critical industries. Looking ahead, industry watchers will closely monitor the trajectory of international crude oil prices and the geopolitical landscape in West Asia, which remain pivotal for future SAED adjustments and the profitability of India refining sector. Any significant resurgence in global oil benchmarks could prompt a re-evaluation of these rates, potentially impacting refiners' margins or government revenue collection. The June 1 adjustments set the stage for how India plans to manage its energy economics in the coming months.