Govt hikes diesel and ATF export duties, drops petrol levy, steering OMC shares

India's central government lifted export duties on diesel and aviation turbine fuel while removing the petrol export levy for the fortnight starting Oct 31, putting Indian Oil Corp (IOCL), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) in market focus. On Saturday the windfall gains tax on diesel and ATF exports was raised and the petrol export duty, previously ₹2.5 per litre, was cut to zero. ATF duty rose to ₹11 per litre from ₹10.5, and the special additional excise duty plus road and infrastructure cess on diesel exports jumped to ₹11.5 per litre from ₹8.5. The revised rates apply only for the two‑week period beginning Oct 31. These moves follow earlier export duties imposed on diesel and ATF in March and aim to boost domestic fuel availability amid the West Asia war and high global crude prices. IOCL shares closed Friday at ₹130 on the BSE, down 0.12%, with a market capitalisation of ₹1,83,576.10 crore. BPCL fell 1.47% to ₹284.30, market cap ₹1,23,342.68 crore. HPCL slipped 0.72% to ₹339.50, market cap ₹72,239.57 crore. Higher diesel export duty could squeeze export earnings for refiners, while the petrol duty cut may offer some relief to exporters. The higher SAED and cess raise the cost of exporting diesel, which may reduce export volumes.

Context

Export duties are a key tool for the government to manage fuel supply and price gaps between domestic and overseas markets. Changes in these duties directly affect the earnings and stock performance of India's major oil marketing companies.