- Centre increased diesel, ATF export duties; reduced petrol levy.
- Move follows higher crude prices, effective July sixteenth.
- This second revision within weeks affects refining profitability.
The Centre has once again revised windfall taxes on petroleum exports, increasing the levy on diesel and aviation turbine fuel (ATF) while reducing the duty on petrol exports, as higher global crude oil prices improve refining margins.
The revised rates, notified by the Finance Ministry, came into effect on Thursday and reflect the government’s periodic review of export duties in line with movements in international oil prices and refining economics.
Diesel, ATF Export Duties Increased
According to a Finance Ministry notification, the export duty on diesel has been increased to Rs 15.5 per litre from Rs 8.5 per litre.
Similarly, the levy on aviation turbine fuel (ATF) exports has been raised to Rs 14.5 per litre, up from Rs 7.5 per litre.
In contrast, the government has lowered the export duty on petrol to Rs 2.5 per litre from Rs 4 per litre.
The revised rates became effective from July 16, the notification stated.
Higher Oil Prices Trigger Fresh Duty Review
The latest revision comes against the backdrop of elevated crude oil prices following the escalation of hostilities between the United States and Iran.
Global oil markets witnessed heightened volatility earlier this week after US President Donald Trump reimposed a naval blockade on Iranian ports, prompting retaliatory strikes by Iran on US infrastructure in the region.
The sharp rise in crude prices has improved refining margins, prompting the government to recalibrate windfall taxes on petroleum exports.
The Centre periodically reviews the Special Additional Excise Duty (SAED) on domestically produced crude oil and exports of petroleum products to keep pace with changes in international crude prices and refining profitability, according to the Finance Ministry.
Another Revision Within Weeks
This is the second revision in the windfall tax structure within a short span.
Earlier this month, the government had increased the export duty on petrol while reducing the levies on diesel and aviation turbine fuel.
At that time, the SAED on petrol exports was raised to Rs 4 per litre from Rs 1.5 per litre. Meanwhile, export duties on diesel and ATF were reduced to Rs 8.5 per litre and Rs 7.5 per litre, respectively.
The latest notification effectively reverses that trend by raising taxes on diesel and ATF exports while easing the levy on petrol shipments.
Could Fuel Exports Slow?
The higher export duties could influence overseas fuel shipments at a time when India’s petroleum exports are gathering momentum.
According to a Bloomberg report, India’s fuel exports were on course to reach their highest level since September before the latest tax revision.
With export taxes increasing on diesel and ATF, refiners may reassess export economics even as international demand remains firm due to concerns over global energy supplies.
Why India Curbed Bulk Fuel Purchases Earlier
The latest tax changes follow a series of measures introduced by the Centre to safeguard domestic fuel availability amid heightened geopolitical uncertainty.
In June, the government temporarily barred industrial, commercial and institutional consumers from purchasing petrol and diesel at retail fuel stations, directing them instead to procure supplies through bulk distribution channels.
The measure was aimed at ensuring adequate fuel availability for retail consumers, discouraging stockpiling and preventing diversion of supplies during a period of volatile global oil markets.
Officials had observed a significant increase in purchases at retail pumps after bulk consumers shifted away from dedicated supply arrangements because retail fuel prices had become substantially cheaper.
At the time, diesel retailed at Rs 95.20 per litre in Delhi, while bulk buyers paid Rs 134.50 per litre, reflecting the difference between subsidised retail pricing and market-linked bulk fuel rates.
To prevent misuse, diesel sales at retail outlets were restricted to vehicle fuel tanks or approved containers, with purchases capped at 200 litres per customer or vehicle per day.
Although the restrictions were initially intended to remain in force for up to 90 days, the Centre withdrew them on June 29, allowing normal fuel sales to resume from July 1.
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: abplive.com
