India introduces fuel export taxes to protect domestic market

On March 27, India announced a series of tax changes on fuel to protect the domestic market from sharp fluctuations in supply and prices caused by the long-running conflict in the Middle East. This is reported by Bloomberg.

The country has set an export duty of 21.5 rupees (23 cents) per liter of diesel fuel and 29.5 rupees per liter of aviation fuel.

“This will ensure sufficient supply of petroleum products for domestic consumption,” Finance Minister Nirmala Sitharaman stressed.

At the same time, India has reduced the central excise tax on gasoline and diesel for domestic sales by 10 rupees per liter.

Oil Minister Hardeep Puri noted that the export duty was introduced due to a jump in global prices, so refineries will have to pay higher fees when supplying abroad.

According to Puri, reducing domestic taxes will help companies offset losses and protect the population from high prices. Currently, retail chains are losing 24 rupees per liter of gasoline and 30 rupees per liter of diesel due to the high cost of oil in international markets.

India is the third largest consumer of oil in the world and imports most of its energy resources through the Strait of Hormuz, which is why it is significantly affected by instability in the Middle East. The conflict leads to a shortage of liquefied and natural gas, which is hitting industry and households.

India has kept retail fuel prices frozen since March 2024, despite a 30% increase in the cost of crude oil in the world. The last time excise duties were reduced in May 2022 to support citizens during the pandemic. In April 2025, the government increased excise duty, but this decision was not reflected in end consumers at that time.

Indian refiners have reportedly contracted about 60 million barrels of Russian crude for delivery next month, easing concerns about a shortage of crude caused by the Middle East war.

The cargoes were booked at a premium of $5 to $15 per barrel to Brent crude. That’s in line with the current month’s purchases, but double February’s, according to analyst firm Kpler.

Tags: export, India, duties, fuel