1. News

Govt Hikes Export Duty on Petrol & Diesel; Read How it Will Change Domestic Fuel Prices

According to the order, fuel exporters must guarantee that during the current fiscal year, which runs through March 31, 50% of the gasoline quantity specified in the shipping bill has been or will be provided to the local market. For diesel, a 30% local selling commitment is required.

Binita Kumari
Shares of public and private refining companies were observed plummeting as a result of restrictions on domestic oil refineries' ability to export oil, with Reliance Industries’ stock falling more than 5%.
Shares of public and private refining companies were observed plummeting as a result of restrictions on domestic oil refineries' ability to export oil, with Reliance Industries’ stock falling more than 5%.

The Indian government raised the export taxes on petrol, diesel, and ATF today in a move that would aid in meeting domestic demand. Fuel export taxes have increased by Rs. 6 per liter for petrol and by Rs. 13 per liter for diesel. ATF export taxes have increased by Rs. 6 per liter.

It should be highlighted that raising the export taxes on different fuels won't raise costs for domestic fuel. Additionally, the government has mandated that exports sell 30% of their diesel and 50% of their petrol in domestic markets.

Reliance Industries Ltd. RELI.NS and Nayara Energy, which are both partially controlled by Russian oil major Rosneft, may see a decline in their international sales as a result of India's decision to ban exports of diesel and petrol to increase supplies in domestic markets.

According to the order, fuel exporters must guarantee that during the current fiscal year, which runs through March 31, 50% of the petrol quantity specified in the shipping bill has been or will be provided to the local market.

For diesel, a 30% local selling commitment is required. Another government notification revealed that an additional tax of Rs 23,230 per tonne had been imposed on domestically produced crude oil to offset producers' windfall profits from high international oil prices.

While private-sector refineries make significant profits from exporting petroleum to markets like Europe and the US, the proposal to tax exports is an attempt to profit from the high price of crude oil. The tariff on domestic crude oil production comes after local producers profited handsomely from the rise in global oil prices.

Since the government announced a price reduction on May 21, domestic petrol and diesel prices have remained stable. Given that domestic fuel costs are unaffected by the levies the government announced today, domestic prices are likely to stay low.

Shares of public and private refining companies were observed plummeting as a result of restrictions on domestic oil refineries' ability to export oil, with Reliance Industries’ stock falling more than 5%.

Share your comments

Subscribe to our Newsletter. You choose the topics of your interest and we'll send you handpicked news and latest updates based on your choice.

Subscribe Newsletters