India scraps petrol export duty, raises diesel levy to 11.50 rupees per litre
Key Facts
India scrapped the export duty on petrol, cutting it from 2.50 rupees per litre to zero, while raising the duty on high-speed diesel to 11.50 rupees per litre from 8.50 rupees, according to a report published by The Economic Times, citing Reuters. The export duty on aviation fuel also rose to 11 rupees per litre from 10.50 rupees. The new rates took effect on 31 October 2026. The move changes duties on three petroleum products, cutting the petrol levy while increasing those on diesel and aviation fuel. The report said the government introduced export duties amid disruptions to global energy supplies, aiming to steer refineries toward meeting demand from domestic buyers.
The government said the duties were intended to curb refineries’ preference for overseas markets over domestic buyers when export returns were higher. The system took effect on 27 March 2026, according to India’s finance ministry in a statement carried by the Press Information Bureau. The ministry said the duties aim to support domestic availability of petroleum products by reducing the incentive to export during the West Asia crisis. It added that rates are reviewed every two weeks based on average international prices since the previous review. The framework puts the new changes within a recurring review system, while the published report did not specify particular reasons for each change to the petrol, diesel or aviation fuel duty.
The direction of the latest adjustment differed from rates previously announced by the finance ministry in its June review. The diesel export duty then stood at 13.5 rupees per litre, and the aviation fuel duty at 9.5 rupees per litre, while the petrol duty was 1.5 rupees per litre during the fifteen-day period that began on 1 June 2026. The ministry said in that adjustment that domestic taxes on petrol and diesel had not changed. Compared with those rates, the new diesel duty is below the June level, while the aviation fuel duty is higher and the petrol duty has been scrapped. The comparison shows how rates differed between reviews, without the report estimating their effect on refinery profits or export volumes.
In a separate economic development, India’s industrial production index recorded annual growth of 8.0% in August 2026, supported by growth of 9.0% in manufacturing and 12.3% in electricity and gas, according to the statistics ministry. The government said at the time that manufacturing had grown by at least 8% for three consecutive months. The index reading for October is due on 30 November 2026. The next release date follows the change to petroleum product duties, offering a more recent reading of Indian industrial activity. The release-date statement did not link industrial production data to the export duty decision.
In markets, the front-month U.S. heating oil futures contract, HOUSD, settled at 4.655 dollars per gallon on NYMEX on 30 October 2026, according to EL7 data. This figure is a futures settlement, not a pump or retail price. The settlement was recorded the day before India’s new duties took effect. The market data provided do not assess the effect of India’s decision on the contract. The report also does not provide price movements for petrol, diesel or aviation fuel in the Indian market following the announcement.