Government raises diesel duties and hikes ATF levy with immediate effect

The Union government on Saturday increased excise duties on key petroleum products, including high-speed diesel and aviation turbine fuel (ATF), with immediate effect.

According to a notification issued by the Ministry of Finance (India), the export duty, also known as the windfall tax, on diesel has been raised from Rs 21.5 per litre to Rs 55.5 per litre, marking a steep increase of Rs 34 per litre.

The government has also increased the Special Additional Excise Duty on high-speed diesel to Rs 24 per litre. In addition, the Road and Infrastructure Cess on diesel has been raised to Rs 36 per litre under provisions of the Finance Act, 2018.

Officials said the move aims to align domestic fuel levies with rising global crude oil prices and prevent exporters from benefitting disproportionately from international price differences.

The duty on aviation turbine fuel (ATF) has also been increased from Rs 29.5 per litre to Rs 42 per litre. However, the export duty on petrol remains unchanged at zero.

Global oil markets have been volatile following the recent escalation of tensions in West Asia. Military action earlier this year involving the United States, Israel and Iran triggered supply concerns, though a temporary ceasefire was agreed on 8 April.

The government stated that the decision to revise duties was taken in response to evolving market conditions and that the changes take effect immediately.

In a related move, oil marketing companies have also raised ATF prices. Domestic airlines will now pay Rs 1,04,927.18 per kilolitre, up from Rs 96,638.14 per kilolitre, representing an 8.56 per cent increase. Prices for foreign carriers and non-scheduled, charter and ad-hoc operators have been raised more sharply to Rs 2,07,341.22 per kilolitre.

Market analysts said the higher ATF prices could provide short-term relief to oil marketing companies, even as airlines face rising operating costs.

With IANS inputs