With the global crude oil prices cooling down over concerns of recession, the Centre has reduced the windfall tax on diesel and aviation turbine fuel (ATF) shipments by Rs 2 per litre, and completely scrapped a Rs 6-per-liter levy on gasoline exports, according to a government notification, reported news agency Bloomberg.
The central government has abolished the tax imposed on export of petrol and cut export taxes on diesel and ATF by Rs 2 a litre from Rs 13 and Rs 6 per litre, respectively, imposed on July 1. The additional excise duty on domestic crude has also been slashed by 27 per cent to Rs 17,000 per barrel, according to the report. The new rates will be applicable from Wednesday.
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The move will provide relief to the nation’s top fuel exporter Reliance Industries Ltd. and crude explorer Oil & Natural Gas Corp.
The taxes were imposed after several countries placed windfall levies to tap energy companies’ booming profits. However, the declining global fuel prices since then eroded profit margins of both oil producers and refiners.
International crude prices have crashed since mid-June on concerns about a potential global recession and at some point, erasing all the profits that followed Russia’s invasion of Ukraine. The returns from processing gasoline and diesel in Asia also took a hit in recent weeks, with industry consultant FGE expecting a further decline in margins this quarter due to increased supplies.
Reliance and Rosneft-backed Nayara Energy Ltd, privately owned refiners, make up 80-85 per cent of India’s overall gasoline and diesel exports, according to FGE.
Brent crude prices declined 39 cents or 0.5 per cent to $106.96 a barrel, while US West Texas Intermediate (WTI) crude fell 62 cents to $103.60 per barrel, according to Rueters.