India Slashes Export Taxes on Fuel as Reliance Prepares Bond Issue Amid Stock Volatility

The Indian government has reduced export duties across petrol, diesel, and aviation turbine fuel in its latest fortnightly review, revising levies downward following a series of adjustments prompted by Middle East conflict volatility. Under the notification issued by the Finance Ministry, the export levy on diesel was lowered by Rs 5 to Rs 20 per litre, while the tax on aviation turbine fuel was reduced to Rs 15 per litre from Rs 19. The duty on petrol exports was trimmed to Rs 0.5 per litre from Rs 1.5. The changes, effective September 16, provide relief to major refiners even as Reliance Industries shares face broader downward pressure in 2026.

The revisions mark a partial retreat from increases implemented earlier in the month, when authorities sought to calibrate domestic energy supplies. According to data from the Petroleum Planning and Analysis Cell, domestic retail fuel prices remained untouched, with petrol holding at Rs 102.12 per litre and diesel at Rs 95.20 per litre in Delhi as of September 16. Petroleum exports accounted for 22.9 percent of India's petroleum, oil, and lubricants production and 10.8 percent of gross exports in June.

The latest fortnightly review alters the components governing export duties on petroleum products. For diesel, the previous Rs 25-per-litre charge comprised Rs 24 of Special Additional Excise Duty alongside a Re 1 Road and Infrastructure Cess. Under the updated schedule, the special additional excise duty is lowered to Rs 20 per litre while the infrastructure cess is brought down to nil.

These export taxes were originally reinstated on March 27, 2026, as geopolitical tensions involving Iran and the United States caused crude prices to swing sharply. Brent crude futures hovered near $106 per barrel and West Texas Intermediate traded above $102 per barrel around the time of the announcement, reflecting sustained volatility in global energy markets that influenced successive fortnightly reviews by the administration.

Concurrently, Reliance Industries is moving to raise Rs 12,500 crore through a five-year domestic bond issue priced at approximately 7.47 percent, according to banking sources familiar with the transaction. Lenders arranging the placement include Axis Bank, HDFC Bank, ICICI Bank, and Yes Bank, with Axis Bank slated for the largest allocation.

The corporate debt transaction represents the Mukesh Ambani-led conglomerate's first major foray into the domestic bond market since 2023. Bankers noted that the issuance coincides with heightened liquidity across Indian banking institutions, supported by a surge in foreign currency deposits that has expanded capital available for corporate deployment.

Shares of Reliance Industries have experienced a notable downturn, falling more than 21 percent over the course of 2026 and underperforming the Nifty 50 index, which registered an 11 percent decline over the same timeframe. The heavyweight stock dropped nearly 3 percent within a week and 6 percent over a month, bringing its 12-month contraction to a little over 12 percent.

The broader market correction has been driven by escalating energy prices and rising bond yields resulting from geopolitical friction. As India's most valuable company with a market capitalization exceeding Rs 18 lakh crore, Reliance operates two refineries at Jamnagar producing roughly one-fourth of the nation's aviation turbine fuel, a significant portion of which is directed toward international buyers.