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New Delhi, India | March 27, 2026
In a major step to control rising fuel costs, the Government of India has reduced excise duties on petrol and diesel while revising taxes on Aviation Turbine Fuel (ATF). The move aims to maintain price stability amid global crude oil volatility caused by the ongoing West Asia crisis.
Excise Duty Reduced to Stabilize Petrol and Diesel Prices
The government has significantly cut fuel duties:
- Petrol excise duty reduced from ₹13 to ₹3 per litre
- Diesel excise duty reduced from ₹10 to zero
Officials stated that this decision was taken in the public interest to shield consumers from rising international crude oil prices.
The changes have been implemented under provisions of the Central Excise Act, 1944 and related finance laws.
ATF Tax Revised to Support Aviation Sector
Alongside fuel duty cuts, the government has revised taxes on Aviation Turbine Fuel:
- New excise duty introduced: ₹50 per litre
- Effective duty after exemptions: ₹29.5 per litre
This adjustment is expected to balance revenue generation while reducing pressure on the aviation industry.
Changes Amid Global Energy Crisis
The decision comes amid disruptions in global oil supply due to geopolitical tensions involving the United States, Israel, and Iran.
The crisis has impacted crude oil availability and pricing worldwide, prompting governments to take measures to protect domestic economies.
Export Rules and Regional Supply Adjustments
The government clarified that:
- Revised excise rules will not apply to exports
- Exceptions remain for public sector oil companies supplying fuel to neighboring countries such as Nepal, Bhutan, Bangladesh, and Sri Lanka
Additionally, amendments to the Central Excise Rules, 2017, state that rebate and export benefits will not apply to petrol, diesel, and ATF under the new framework.
Immediate Implementation of New Rates
All revised duty rates came into effect immediately following official notifications issued on March 26, 2026.
The government emphasized that the decision balances:
- Consumer relief
- Industry stability
- Revenue considerations
By cutting excise duties and revising ATF taxes, the government has taken a proactive step to stabilize fuel prices and support key sectors. The move highlights a strategic effort to manage economic impact amid global energy uncertainty.
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