India raises windfall tax on diesel, petrol, jet fuel

India on Monday raised windfall taxes on fuel exports, designed to ensure sufficient domestic supply and boost state coffers at a time when prices remain volatile over the conflict in the Middle East, according to a government order.

The export duty on petrol has been increased to 3.5 rupees ($0.0367) per litre from 2.5 rupees effective immediately, the government said.

The total duty on diesel exports has been raised to 25.5 rupees per litre through a combination of two levies from 15.5 rupees a fortnight ago.

The tax on aviation fuel has been set at 22 rupees per litre up from 14.5 rupees from Monday.

India first imposed the windfall tax in July 2022 to capture extraordinary gains from soaring oil prices, collecting 250 billion rupees ($2.62 billion) in 2022. Total collection fell to 130 billion rupees in 2023-24. The levy was scrapped in December 2024, but reintroduced in March 2026 after oil prices surged during the U.S.-Israeli war on Iran.

Oil prices have been volatile since the last revision of the taxes two weeks ago. The price of the commodity fell more than 5% on Monday after U.S. President Donald Trump held off on a fresh attack on Iran in the hope of sealing a quick deal.