NEW DELHI: The government on Thursday increased the excise duty on the export of diesel and aviation turbine fuel (ATF) and also raised the windfall profit tax on domestically-produced crude oil.
The Finance Ministry, in its fourth fortnightly review, increased excise to Rs 13.5 per litre from Rs 7 per litre on the export of diesel and Rs 9 from Rs 2 per litre on the export of jet fuel or ATF. It has also raised the windfall tax on domestically-produced crude oil from Rs 13,000 to Rs 13,300 per tonne. The new levies come into effect from 1 September 2022.
The government, to control the price and supply of oil in the domestic market, introduced windfall profit taxes on July 1, 2022. It also imposed export duties of Rs 6 per litre on petrol and aviation turbine fuel and Rs 13 a litre on diesel.
The ministry also levied Rs 23,250 per tonne windfall profit tax on domestic crude production. Though the oil prices have cooled down since then, it eroded the profit margin of oil producers and suppliers. India’s crude oil import basket, which was $105.49 per barrel in July 2022 and $116.01 in June 2022, has come down to $97.40 per barrel in August 2022.
The government has adjusted levies in the previous three rounds on July 20, August 2 and August 19. In its last revision on August 19, the ministry had reduced the windfall tax on petroleum crude to Rs 13,000 per tonne from Rs 17,750 per tonne after crude oil prices reached 6 month low.
Private refiners Reliance Industries and Rosneft-based Nayara Energy are the main exporters of fuels like diesel and ATF. The windfall levy on domestic crude targets producers such as state-owned Oil and Natural Gas Corporation (ONGC) and Vedanta. Currently, Brent Crude Future is at $96.53 per barrel (8.11 pm IST) and US West Texas Intermediate was trading at $88.13 per barrel.
Levies on diesel and jet fuel exports
Diesel: Duty on export hiked from Rs 7 per litre to Rs 13.5
ATF: Duty on exports hiked from Rs 2 per litre to Rs 9
Domestically-produced crude oil: Hiked from Rs 13,000 per tonne to Rs 13,300 per tonne