AI-assisted research analysis by FutureKnowledge. Sources checked 1 November 2026. This is not investment advice.
Reviewed by FutureKnowledge: figures, dates and attributions were checked against the linked sources before publication.
India has raised its export duty on diesel by ₹3 to ₹11.50 a litre and scrapped the ₹2.50 levy on petrol exports, in a fortnightly revision that took effect on 31 October 2026. The duty on exported aviation turbine fuel (ATF) rises by 50 paise to ₹11 a litre.
Diesel export duty raised: what changed on 31 October
The Department of Revenue notified the new rates on Saturday, and they apply from the date of publication in the Official Gazette, The Tribune reported. The gazette text, reproduced by tax advisory firm A2Z Taxcorp, shows two notifications dated 31 October. Notification No. 55/2026-Central Excise sets the petrol rate to “Nil” and diesel to ₹11.5 a litre. Notification No. 56/2026-Central Excise sets ATF at ₹11 a litre. Both amend the original March notifications that created the levy.
| Product (exports) | Rate from 16 Oct | Rate from 31 Oct | Change |
|---|---|---|---|
| Petrol | ₹2.50/litre | Nil | -₹2.50 |
| High-speed diesel | ₹8.50/litre | ₹11.50/litre | +₹3.00 |
| ATF | ₹10.50/litre | ₹11.00/litre | +₹0.50 |
Source: Central Excise notifications 55 and 56 of 2026; rates confirmed by Business Standard, The Tribune and ANI.
The government said excise duty on petrol and diesel sold at home is unchanged, according to Business Standard. This is a tax on fuel leaving the country, not a tax at the pump.
Why the government changes the levy every fortnight
The export levies were introduced on 27 March 2026, a month after the war involving Iran began, with the stated aim of keeping fuel available in India by making exports less attractive, ANI reported. Rates are reviewed every two weeks against average international prices of crude oil, petrol, diesel and ATF since the last review.
The logic is simple. When overseas fuel prices rise faster than crude, refiners earn more by shipping fuel abroad. A higher duty takes away part of that gain and nudges supply towards the domestic market. When product prices cool, the duty is cut.
Diesel stays tight while petrol eases
The split decision mirrors the global market. The International Energy Agency has said diesel availability was 1.7 million barrels a day lower year on year in the third quarter and that the shortage could last well into 2027, as The National reported. Gasoline is a different story. In the US, regular gasoline fell for a fifth straight week to $4.269 a gallon in the week to 23 October while diesel was $6.352, Discovery Alert reported, citing EIA data. Weaker petrol margins left little extra profit to tax, while diesel margins stayed high.
How the levy has moved since March
The new diesel rate is high compared with mid-October but far below the levels seen earlier in the crisis. Data from the Petroleum Planning and Analysis Cell (PPAC) shows the following export rates.
| Effective date | Petrol (₹/litre) | Diesel (₹/litre) | ATF (₹/litre) |
|---|---|---|---|
| 27 Mar 2026 | – | 21.50 | 29.50 |
| 11 Apr 2026 | – | 55.50 | 42.00 |
| 3 Aug 2026 | 3.50 | 25.50 | 22.00 |
| 1 Oct 2026 | 0.50 | 16.00 | 10.50 |
| 16 Oct 2026 | 2.50 | 8.50 | 10.50 |
| 31 Oct 2026 | Nil | 11.50 | 11.00 |
Source: PPAC (rates to 16 October include special and additional excise duty); 31 October rates from the gazette notifications.
At ₹11.50, the diesel levy is about a fifth of its 11 April peak of ₹55.50. Petrol exports were also free of the levy from 15 August, before it returned on 1 September. The 31 October move is the first diesel increase since 1 September, according to the PPAC table.
How it affects India and businesses
Refiners that export
The direct effect falls on export-oriented refiners. Reliance Industries accounts for roughly 70% of India’s fuel exports, NiftyTrader reported, citing The Economic Times, with Nayara Energy, MRPL and others making up the rest. Diesel is the biggest export product. NiftyTrader put it at about 42% of export volumes in April–September, when diesel export earnings rose about 58% to around ₹1.20 lakh crore even as volumes fell 19%. A ₹3 increase therefore matters more than the petrol cut. Petrol was about 23% of export volumes in the same period, so the end of the petrol levy only partly offsets the higher diesel duty.
Refining margins have driven recent results. Reliance’s oil-to-chemicals business was the main reason its September-quarter profit rose 41% to ₹25,548 crore. The duty notifications alone do not show the company-level impact, and NiftyTrader notes that markets were shut on Saturday, so there has been no share price reaction yet. Trading resumes on Monday, 2 November.
Consumers and airlines
Pump prices are not directly affected. PPAC data cited by NiftyTrader put Delhi petrol at ₹102.12 and diesel at ₹95.20 a litre on 30 October. Open magazine points out that the ATF levy applies to exported jet fuel, not to fuel bought by Indian airlines, so it does not by itself raise fares. The indirect aim is to keep more diesel at home for trucks, farms and industry.
Public finances
A higher duty adds to revenue if export volumes hold. That comes on top of strong indirect tax receipts, with October GST collections up 22.9% to ₹2.31 lakh crore. No official estimate of revenue from the export levy was found.
Who is more or less exposed
- More exposed: refiners with a large share of diesel in their exports, and coastal export refineries built mainly for overseas markets.
- Less exposed: refiners selling mostly in India, and petrol-heavy exporters, who gain from the scrapped levy.
- Largely unaffected directly: retail fuel buyers and domestic airlines, since domestic excise and ATF sales are not covered.
Scenarios to watch
These are conditional scenarios, not predictions.
| If… | Then a plausible outcome is… |
|---|---|
| Diesel prices stay high into the mid-November review | The diesel duty could stay at or above ₹11.50 |
| A Hormuz deal eases product markets | Export duties could be cut sharply, as happened in May and October |
| Petrol margins recover | A petrol levy could return, as it did in September |
| Domestic diesel demand rises in the rabi season | The government may lean towards keeping export duties firm |
What to watch next
- The next fortnightly revision, due around mid-November.
- Refiner shares when markets open on 2 November.
- US-Iran talks on reopening Hormuz, which we covered alongside the OPEC+ decision to hold December output.
- Monthly PPAC data on product exports and domestic consumption.
Bottom line
The export duty revision is a market-linked adjustment, not a new policy. It taxes diesel more because diesel margins are still strong, and frees petrol because they are not. For refiners, the higher diesel duty is the bigger change. For households, pump prices do not change through this route.
Method note: This analysis compared reports from Business Standard, The Tribune, ANI, Open magazine and NiftyTrader with the gazette text of Central Excise notifications 55 and 56 of 2026 and PPAC’s rate history (primary sources). Global diesel and gasoline context comes from The National (IEA) and Discovery Alert (EIA data). All outlets agreed on the new rates. Export-share and earnings figures are single-source and attributed.