India Adjusts Export Duties on Diesel and Jet Fuel Amid Global Oil Market Volatility
- MGMMTeam
- May 1
- 3 min read
India has taken a measured step to support its refining industry and maintain energy stability by reducing export duties on key petroleum products. On April 30, 2026, the government announced cuts to export duties on diesel and aviation turbine fuel (ATF), effective from May 1. This adjustment comes as global oil markets continue to experience fluctuations influenced by developments in West Asia and evolving international supply patterns.
Recent Policy Adjustment
The export duty on diesel has been lowered to ₹23 per litre from ₹55.5 per litre, while the levy on ATF has been reduced to ₹33 per litre from ₹42 per litre. The duty on petrol exports remains unchanged at nil, and domestic fuel taxes have been kept steady. This calibrated change seeks to balance refinery margins with the need to ensure adequate domestic supplies. It follows a series of earlier measures introduced in March and April 2026, when duties were initially imposed and later increased to prioritise availability within the country during a period of heightened global uncertainty.
Geopolitical Context and Supply Challenges
The policy shift occurs against the backdrop of ongoing tensions in West Asia, which have affected crude oil transportation routes, particularly through the Strait of Hormuz. As one of the world's largest oil importers, India has seen its traditional supplies from the region decline notably in recent months. These disruptions have prompted Indian refiners to adapt quickly, drawing from a broader range of international sources to meet domestic energy requirements. Global crude prices experienced sharp increases earlier in the period but have since shown signs of moderation, though volatility persists.
Diversification of Crude Imports
To address the supply constraints, India has strengthened imports from alternative producers, including a significant rise in purchases of Russian crude during March and April 2026. This diversification has helped offset reductions from West Asian sources. Russian crude has offered competitive pricing, supported in part by temporary international waivers, allowing refiners to maintain operations efficiently. Other regions, such as Africa and Latin America, have also contributed to a more resilient import mix. These efforts reflect India's proactive approach to safeguarding energy security amid external challenges.
Role of Regional Developments Including UAE's OPEC Exit
A notable development in the global oil landscape is the United Arab Emirates' decision to exit OPEC and OPEC+. This move is expected to introduce greater flexibility in production decisions outside traditional quota systems. For India, which already sources a meaningful share of its crude from the UAE, this could support more stable and potentially favourable supply conditions over the medium term. Such shifts in international oil alliances may contribute to easing long-term price pressures for major importing nations.
Effects on Refining Industry and Domestic Consumers
The adjustment in export duties is designed to help Indian refiners navigate strong margins on middle distillates while encouraging a focus on both domestic and select export opportunities. Diesel exports had shown growth in March, demonstrating the sector's adaptability. On the consumer side, measures such as capping monthly ATF price increases for domestic airlines have helped moderate impacts on airfares. Overall, these policies aim to protect everyday users from excessive volatility while supporting the vitality of India's refining sector, which plays a crucial role in the economy.
The MGMM Outlook
India’s decision to reduce export duties on diesel and aviation turbine fuel reflects a carefully calibrated response to ongoing global oil volatility. By lowering these levies while keeping domestic fuel taxes steady, the government is attempting to strike a balance between supporting refinery margins and ensuring adequate domestic supply. This approach acknowledges the pressures created by fluctuating crude prices and disrupted supply routes, particularly in West Asia, while avoiding sudden shocks to consumers. The move also signals continuity in policy—building on earlier duty adjustments—to maintain stability in a sensitive and essential sector.
At the same time, India’s broader strategy of diversifying crude imports has strengthened its energy security. Increased sourcing from Russia, along with contributions from Africa and Latin America, has reduced dependence on traditional suppliers and helped offset geopolitical disruptions. Developments such as the UAE’s exit from OPEC may further reshape supply dynamics in India’s favour over time. Together, these measures indicate a pragmatic and adaptive energy framework that supports industrial efficiency, cushions consumers from volatility, and positions India to navigate an increasingly uncertain global oil landscape.
(Sources: Firstpost, Indian Express, Times of India)
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