India Introduces New Export Taxes on Fuel to Stabilize the Market
This is reported by AgroReview
On March 27, the Indian government announced a change in tax policy regarding fuel aimed at protecting the national market from price fluctuations and shortages caused by the prolonged crisis in the Middle East.
New Taxes on Diesel and Aviation Fuel Exports
According to the new measures, an export duty of 21.5 rupees (approximately 23 cents) per liter has been imposed on diesel fuel, while aviation fuel will incur a duty of 29.5 rupees per liter. These measures are intended to balance the supply of energy resources in the domestic market, ensuring priority for national consumers during periods of heightened volatility in global prices.
“This will ensure a sufficient supply of petroleum products for domestic consumption,” emphasized Finance Minister Nirmala Sitharaman.
At the same time, the government has reduced the central excise duty on gasoline and diesel for the domestic market by 10 rupees per liter. According to Oil Minister Hardeep Puri, this decision will help offset company losses and curb rising fuel prices for the population. Currently, the retail market is losing 24 rupees on every liter of gasoline and 30 rupees on every liter of diesel due to high global oil prices.
Impact of Instability in the Middle East and Imports from Russia
India, the third-largest oil consumer in the world, is heavily dependent on energy resource imports through the Strait of Hormuz. Geopolitical tensions in the region have led to disruptions in the supply of liquefied and natural gas, negatively affecting the country’s industry and households.
The government has kept retail fuel prices frozen since March 2024, despite a rise in global oil prices of over 30%. The last excise cuts were made in May 2022 in response to the pandemic, and the increase in excise in April 2025 did not affect end consumers.
Indian refineries have already contracted approximately 60 million barrels of oil from Russia for delivery in April. This helps partially mitigate the risks of raw material shortages associated with the situation in the Middle East. The purchased volumes correspond to the current monthly level but are double the figures from February. The cost of shipments ranges from $5 to $15 per barrel above the Brent crude oil price, according to the analytical company Kpler.