Petrol, Diesel and ATF Duty Cuts Announced: What has the government changed?

The Centre has cut excise duty on petrol and diesel through a set of notifications issued by the Ministry of Finance on March 26, 2026, bringing the revised rates into effect immediately.

Excise duty is a tax imposed by the government on goods manufactured within the country and is a key component of the retail price of fuels.

As per the notified order, excise duty on petrol has been reduced to Rs 3 per litre. This implies a reduction of about Rs 10 per litre from earlier levels. The duty on petrol has been brought down from around Rs 13 per litre to about Rs 3 per litre under the revised structure.

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The notification also indicates that the duty on petrol has been reduced from around Rs 8 per litre to Rs 3 per litre in the updated framework. The Special Additional Excise Duty (SAED), which is an extra levy over the basic excise duty, has also been reduced and is now around Rs 3 per litre on petrol.

On diesel, the government has removed excise duty completely, bringing the levy down to nil. The duty on diesel was earlier around Rs 10 per litre. The order further shows that the Special Additional Excise Duty on diesel has been effectively done away with, resulting in a zero-duty structure on the fuel.

At the same time, the notification provides that high-speed diesel, which is commonly used in transport and industry, will attract a duty of Rs 3 per litre under the additional excise duty mechanism.

ATF duty revised; export provisions specified

The government has also revised duties on aviation turbine fuel (ATF), which is used to power aircraft. As per the notification, excise duty on ATF for domestic use has been fixed at Rs 29.5 per litre.

For exports, the order specifies that the Special Additional Excise Duty on ATF will be Rs 50 per litre.

The notification states that export-related exemptions will apply to supplies made by public sector oil companies, which are government-owned fuel retailers, to Nepal, Bhutan, Bangladesh and Sri Lanka. It further provides that certain duties on petrol, diesel and ATF will not apply to goods cleared for export under these specified conditions.

All the revised duty rates have come into force with immediate effect from the date of the notification, the order said.

Fuel supply remains stable, says government

The Government of India on Thursday said that fuel supply across the country remains stable and retail fuel outlets are operating normally despite ongoing developments in West Asia.

According to a statement issued by the Ministry of Petroleum and Natural Gas, all retail outlets are functioning without disruption. “All retail outlets are operating normally across the country,” the ministry said.

It added that there are adequate stocks of petrol and diesel available. “There are adequate stocks of petrol and diesel available at all petrol pumps in the country,” the statement said, while advising people not to believe rumours.

The government also said that all refineries are operating at high capacity with sufficient crude inventories to ensure an uninterrupted supply.

LPG supply normal; steps taken to boost availability

The ministry said that while LPG supply has been impacted due to the prevailing geopolitical situation, domestic deliveries remain normal. “No reported dry-out at LPG distributorships” has been reported so far, and the “delivery of domestic LPG cylinders is normal,” the statement said.

To support demand, the government has increased domestic LPG production from refineries. It has also enhanced the allocation of commercial LPG to states and union territories.

“Government of India has allowed another 20 per cent allocation of commercial LPG to states, taking overall allocation to 50 per cent,” the statement said. Priority sectors include restaurants, hotels, industrial canteens, food processing units and community kitchens.

The government said more than 37,000 small LPG cylinders were sold on Wednesday. It has also allocated an additional 48,000 kilolitres of kerosene to states to ease pressure on LPG demand.

Raids intensified; public advised against panic buying

States and union territories have been asked to take strict action against hoarding and black marketing of fuel. The ministry said more than 2,600 raids have been conducted across the country.

“More than 450 cylinders have been seized, over 680 FIRs registered and 195 people arrested so far,” the statement said. States have also been advised to hold regular press briefings and monitor misinformation on social media.

The government said port operations across the country remain normal and there is no congestion. It added that Indian seafarers in the region are safe and no incident involving Indian-flagged vessels has been reported in the past 24 hours.

The Ministry of External Affairs is continuing efforts to assist Indian nationals in West Asia. “Safety, security and welfare of the Indian community remains the highest priority,” the statement said, adding that around 4,50,000 passengers have returned to India since February 28.

The government urged citizens to avoid panic buying. “Citizens are advised to avoid panic purchase of petrol, diesel and booking of LPG, and rely only on official sources for correct information,” the ministry said.