Centre Imposes Export Tax On Petrol, Diesel; Windfall Tax On Domestic Crude Oil
hTe government imposed a Rs 6 per litre tax on export of petrol and ATF and Rs 13 per litre tax on export of diesel, the finance ministry said
An export tax on petrol, diesel and jet fuel (ATF) shipped overseas by firms like Reliance Industries Ltd was imposed by the central government on Friday, the PTI reported, whereas, the Centre also slapped a windfall tax on crude oil produced locally by companies such as Oil and Natural Gas Corporation (ONGC) and Vedanta Ltd.
According to the notification by Finance Ministry, the government imposed a Rs 6 per litre tax on export of petrol and ATF and Rs 13 per litre tax on export of diesel. Additionally, it levied a Rs 23,250 per tonne additional tax on crude oil produced domestically.
The levy on crude, which follows record earnings by state-owned ONGC and Oil India Ltd (OIL) and private sector Cairn Oil & Gas of Vedanta Ltd, alone will fetch the government Rs 67,425 crore annually on 29 million tonnes of crude oil produced domestically.
The export tax follows oil refiners particularly Reliance Industries and Rosneft-backed Nayara Energy making a killing in exporting fuel to deficit regions such as Europe and the US in the aftermath of Russia's invasion of Ukraine.
The refiners are said to have processed Russian crude oil available at discount after it was shunned by the west, and exported fuel produced from it to Europe and the US.
The curbs on export is also aimed at shoring up domestic supplies at petrol pumps, some of which had dried up in states such as Madhya Pradesh, Rajasthan, and Gujarat as private refiners preferred exporting fuel than selling locally.
Exports were preferred as retail petrol and diesel prices by dominant PSU retailers have been capped at rates way lower than cost.
This meant that private retailers, who control less than 10 per cent of the market share, either sell fuel at loss or lose market share if they were to sell at higher cost.
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