Bearish for RELIANCE: India Hikes Diesel, ATF Export Levies

The Indian government has increased the special additional excise duty (SAED), commonly known as windfall tax, on diesel exports to Rs 14 per litre and on aviation turbine fuel (ATF) exports to Rs 12.5 per litre, effective June 16, 2026. This move aims to capture a larger share of the profits made by refiners from elevated international product prices.

This policy change directly impacts the profitability of Indian oil refiners and marketing companies that engage in significant exports of these refined products. Higher levies reduce the net realization from exports, potentially compressing their gross refining margins (GRMs) and overall earnings, especially when global prices are high.

Stocks of major refiners and exporters like Reliance Industries (RELIANCE), Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL), Mangalore Refinery and Petrochemicals (MRPL), and Chennai Petroleum Corporation (CPCL) are likely to face negative sentiment. Their export-driven revenue streams will see a direct hit, leading to potential downward revisions in earnings estimates.

Traders should monitor global crude oil and refined product prices, as these will influence the government's future decisions on windfall taxes. Any further changes in these levies or sustained high international crack spreads will be crucial. Also, watch for company-specific guidance on how this tax hike impacts their Q2 and Q3 FY27 earnings.

• •India increased windfall tax on diesel exports to Rs 14 per litre.
• •Levy on aviation turbine fuel (ATF) exports raised to Rs 12.5 per litre.
• •Tax on petrol exports remains unchanged.
• •Revised rates are effective from June 16, 2026.
• •Risk flag: Sudden reversal or reduction of windfall tax by the government.