New Delhi: As soaring jet fuel margins trigger a refining rush from Europe to the United States and parts of Asia, India is resisting the temptation to ramp up aviation fuel exports. Despite having surplus aviation turbine fuel (ATF) production capacity, refiners are prioritising domestic demand for petrol, diesel and LPG, reflecting the government’s broader focus on fuel security over windfall export gains.
“More people need LPG, gasoline and diesel every day than the need to fly,” Natalia Katona, a commodity analyst at Oilprice.com, told ThePrint, explaining why domestic fuel security remains a bigger priority for policymakers in India than taking advantage of high international jet fuel prices.According to Katona, India remains structurally surplus in ATF production capacity. Even with domestic ATF demand expected to rise by around 10 percent year-on-year in 2025-26 to about 9.95 million tonnes, there is still room for export, without affecting local aviation fuel availability, she said.
Reliance Industries’ Jamnagar refinery, India’s largest jet fuel producer, for instance, exported around 1,00,000 barrels per day (bpd) of ATF before the West Asia conflict.Sumit Ritolia, manager for oil markets and refineries at Kpler, pointed out that Indian jet fuel yields were around one percentage point lower year-on-year during March and April as refiners shifted production toward petrol and diesel. Strong domestic demand and government’s efforts to ensure adequate local fuel supplies have encouraged refiners to prioritise other fuels over aviation fuel.Katona said India could technically be a larger ATF exporter in the current market, but policy considerations and fuel security concerns are limiting how refiners can respond. “India’s refining system has the capacity and ATF surplus, but not necessarily the full export freedom,” she said.In March, the government imposed a Special Additional Excise Duty (SAED), or windfall tax, of Rs 29.5 per litre on ATF exports. The levy was raised to Rs 42 per litre in April before being gradually reduced to around Rs 9.5 per litre in June.India’s cautious approach stands in contrast to refiners in Europe, the United States and parts of Asia, which are increasing ATF output as margins surge.Refiners cashing in on jet fuel boom
