India Cuts Diesel Export Duty to 8.5 Rupees Per Liter Amid Tight Supply

India cut its diesel export levy by nearly half on Friday, Oct. 16, as tight global fuel supplies put the policy shift against a forecast shortfall in gasoil later this year.

The special additional excise duty on diesel exports fell to 8.5 rupees per liter from 16 rupees. The gasoline export levy rose to 2.5 rupees per liter from 0.5 rupees. The aviation turbine fuel export duty remained 10.5 rupees per liter, and domestic gasoline and diesel excise rates did not change.

Global diesel and gasoil availability was 1.7 million barrels per day below its year-earlier level in the third quarter of 2026, following a year-over-year decline of 1.5 million barrels per day in the second quarter. Global diesel exports were 700,000 barrels per day lower in September than a year earlier. Gasoil supply is projected to fall short of demand in the fourth quarter of 2026, and depleted inventories are not expected to be replenished before the second half of 2027.

India first imposed export levies on gasoline, diesel and aviation turbine fuel on March 27, aiming to support domestic availability during the West Asia crisis. Minister of Petroleum and Natural Gas Hardeep Singh Puri said at a Sept. 24 industry event in New Delhi that India would continue product exports and honor its export commitments, a position covered in an earlier statement on India's export commitments.

Every two weeks, India resets the export rates using international price averages for crude oil, gasoline, diesel and aviation turbine fuel over the period since the last review.