Amid disruptions to global oil supplies triggered by rising tensions in West Asia, the Centre has reworked the duty structure on aviation turbine fuel (ATF) and imposed higher export levies on petroleum products to safeguard domestic availability.
Finance Minister Nirmala Sitharaman announced that an export duty of ₹29.50 per litre has been imposed on ATF to ensure sufficient supply for domestic aviation needs. Export duty on diesel has also been fixed at ₹21.50 per litre.
At the same time, the government has reduced central excise duty on petrol and diesel by ₹10 per litre each for domestic consumption, aiming to cushion the impact on consumers amid volatile global energy prices.
Layered duty structure for ATF
Through a series of notifications issued late Thursday, the government introduced a revised tax framework for ATF. A special additional excise duty of ₹50 per litre has been imposed, with exemptions that bring down the effective levy to ₹29.50 per litre in specific cases.
The framework includes provisions for partial or full exemptions depending on the nature of supply, particularly for exports. However, the revised rules will not apply to exports, except for supplies made by public sector oil companies to neighbouring countries such as Nepal, Bhutan, Bangladesh and Sri Lanka.
Export curbs to boost domestic availability
The Centre said the duty changes are designed to discourage exports and redirect fuel supplies towards the domestic market. Sitharaman noted that refiners importing crude oil, processing it in India, and exporting finished products would now be incentivised to prioritise domestic supply.
She emphasised that ensuring adequate ATF availability is critical for the aviation sector, as airlines depend heavily on stable fuel supplies for uninterrupted operations.
Changes to excise rules
Amendments to the Central Excise Rules, 2017, specify that rebate and export procedures will not apply to petrol, diesel, and ATF, except for designated supplies to neighbouring countries by public sector firms.
The government said the revised duty structure aims to strike a balance between domestic fuel availability, consumer affordability, and revenue considerations amid heightened global energy volatility.
