India Adjusts Tax Landscape Amid Global Oil Price Fluctuations

India has cut windfall taxes on diesel and aviation turbine fuel exports due to easing global oil prices, while increasing petrol export duties. New rates are effective from July 1. Falling oil prices align with lowered geopolitical tensions and analysts predict further price decreases by 2026.

India has announced adjustments in windfall taxes, reflecting changes in the global oil price landscape. While the government has reduced duties on the export of diesel and aviation turbine fuel, it has increased the levy on petrol exports to ensure a stable domestic supply.

The new tax rates will go into effect from July 1, with diesel export duty cut from 14 rupees to 8.5 rupees per litre, and aviation turbine fuel duty reduced to 7.5 rupees per litre from 12.5 rupees. Conversely, petrol export duties have increased from 1.5 rupees to 4 rupees per litre.

These adjustments come amidst a significant drop in oil prices from previous peaks over $126 per barrel. This trend is attributed to the easing of geopolitical tensions and a reestablishment of shipping lines through the Strait of Hormuz, calming fears of supply disruptions. Economists suggest the average price for Brent crude will further decrease by 2026.