The government has increased windfall tax on export of diesel to Rs 13.5 per liter and on export of jet fuel to Rs 9 per liter, besides raising levy on domestically produced crude in line with tightening global prices. In the fourth fortnight review, the government increased windfall tax on export of diesel from Rs 7 per liter to Rs 13.5 per litre.
According to a Finance Ministry notification issued late on Wednesday, the tax on Aviation Turbine Fuel (ATF) exports has also been increased from Rs 2 per liter to Rs 9 with effect from September 1. Also, the tax on domestically produced crude oil has also been increased from Rs 13,000 to Rs 13,300 per tonne.
Taxes on exports have been raised as margins have increased, while a marginal change in international oil prices and a marginal increase in levies on domestically produced oil on expectations of a production cut by the Organization of the Petroleum Exporting Countries. was increased. (OPEC) and its allies.
India imposed windfall tax for the first time on July 1, joining a growing number of countries that tax super ordinary profits of energy companies.
But international oil prices have cooled since then, reducing profit margins for both oil producers and refiners. On July 1, an export duty of Rs 6 per liter ($12 a barrel) on petrol and ATF and a tax of Rs 13 per liter ($26 a barrel) on diesel exports was imposed. A windfall tax of Rs 23,250 per tonne was also imposed on domestic crude oil production (US$ 40 a barrel).
Subsequently, in the first fortnightly review on July 20, export duty of Rs 6 per liter on petrol was abolished and tax on export of diesel and jet fuel (ATF) reduced by Rs 2 per liter to Rs 11 and Rs 4 was. respectively. The tax on domestically produced crude was also reduced to Rs 17,000 per tonne.
On August 2, the export tax on diesel was reduced to Rs 5 per liter and the export tax on ATF was abolished after the refinery cracked or eroded margins. But the duty on domestically produced crude was increased to Rs 17,750 per tonne in line with the marginal increase in international crude oil prices.
On August 19, the export tax on diesel was raised to Rs 7 per liter while the tax on ATF was brought back to Rs 2 per litre. In line with the softening crude oil prices, duty on domestic crude production was reduced to Rs 13,300 per tonne. In the fourth fortnightly review on August 31, the tax on diesel and ATF exports as well as on domestically produced crude oil has been increased. Global Brent crude oil prices were hovering around $105 a barrel against $95 a barrel a fortnight ago.
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