The Indian government has cut excise duty on petrol and diesel to shield consumers from rising oil prices amid the Middle East crisis. A windfall tax has been imposed on diesel and aviation turbine fuel exports to secure domestic supply.

RF Report

The Indian government has announced, on 27 March 2026, a reduction in excise duty on petrol and diesel for domestic consumption, citing rising global oil prices amid the rising hostilities in the Middle East. The move aims to shield consumers from further price increases.

Under the new measures, the special excise duty on petrol has been cut from INR 13 per litre to INR 3 per litre, while the duty on diesel has been reduced from INR 10 per litre to zero.

Simultaneously, a windfall tax has been introduced on the export of certain fuels to ensure sufficient domestic supply. Diesel exports will incur a tax of INR 21.50 per litre, and aviation turbine fuel (ATF) will be taxed at INR 29.50 per litre.

The changes are effective immediately.

Union Finance Minister Nirmala Sitharaman highlighted that these steps are intended to protect citizens from fluctuations in the cost and availability of essential fuels.