Centre hikes excise duties on diesel, ATF to curb global price impact

The Union government has sharply increased excise duties on petroleum products, including diesel and aviation turbine fuel, citing volatile global crude prices and disruptions caused by conflict in West Asia. Diesel export duty has been raised to Rs 55.5 per litre, while ATF duty has climbed to Rs 42 per litre.

New Delhi: The Centre on Saturday increased excise duties on petroleum products, including high-speed diesel, with immediate effect, according to a notification issued by the Ministry of Finance.

The Union government has hiked the export duty or windfall tax on diesel by Rs 34 per litre to Rs 55.5 per litre from Rs 21.5 per litre, with immediate effect.

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As per the Gazette notification, the Special Additional Excise Duty on high-speed diesel has been raised to Rs 24 per litre.

In a separate notification, the Union government also increased the Road and Infrastructure cess on diesel to Rs 36 per litre under provisions of the Finance Act, 2018.

The Centre said the revisions were aimed at aligning domestic duties with rising global crude prices and preventing exporters from gaining undue advantage due to price differentials.

Meanwhile, duty on aviation turbine fuel (ATF) has also been raised from Rs 29.5 per litre to Rs 42 per litre, while export duty on petrol continues to remain nil.

Global oil markets have remained volatile following the escalation of conflict in West Asia.

On February 28, the US and Israel launched military strikes against Iran, triggering retaliatory actions from Tehran.

Subsequently, on April 8, Iran, the US and Israel agreed to a two-week ceasefire after the conflict disrupted energy markets and trade flows across the West Asia region.

The notification said the decision to revise duties was taken as circumstances warranted immediate action.

Further amendments have also been made to earlier notifications issued on March 26, 2026, revising applicable duty rates on petroleum products.

All the changes have come into force with immediate effect, the notification added.

Earlier, oil marketing companies hiked ATF prices.

Rates for domestic carriers were increased by Rs 8,289.04 per kilolitre, or 8.56 per cent, to Rs 1,04,927.18 per kilolitre from Rs 96,638.14 per kilolitre.

Meanwhile, prices for foreign carriers and non-scheduled, charter and ad-hoc operators were raised more sharply by 114.5 per cent to Rs 2,07,341.22 per kilolitre.

Analysts said the increase in ATF prices may offer short-term relief to oil marketing companies.