Diesel Export Declines 11% In July After Government Levied Windfall Profit Tax

Diesel Export Declines 11% In July After Government Levied Windfall Profit Tax

New Delhi: After the windfall profit tax was imposed, India’s diesel exports slipped 11 per cent in July and overseas shipments of petrol declined 4.5 per cent, showed official data. Diesel exports dropped to 2.18 million tonnes in July from 2.45 million tonnes a month back, as per the data from the Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC), reported news agency PTI.

India had imposed windfall profit taxes in July joining the list of nations taxing super normal profits of energy companies. The export levies were aimed at easing the strain on the domestic fuel supply. The tax was imposed to deter firms like Reliance Industries Ltd and Russia’s Rosneft-backed Nayara Energy from choosing overseas markets for the fuel they make instead of supplying locally.

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The export duties and regulations to ensure preference for local supplies over exports brought normalcy to petrol pumps. International oil prices have skyrocketed after Russia’s invasion of Ukraine in February dented margins on fuels like petrol and diesel to record highs.

What’s the decline in exports of petroleum products?

Petrol exports declined 1.1 million tonne from 1.16 million tonne in June. Export duties of Rs 6 per litre were levied on petrol and aviation turbine fuel and Rs 13 a litre on diesel.

The duties have been partially adjusted in three rounds on July 20, August 2 and August 19, but removed for petrol now with Rs 7 per litre and Rs 2 per litre effective for diesel and ATF, respectively.

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In July, India exported 4.68 million tonne of petroleum products, 82 per cent of which was petrol, diesel and ATF. ATF exports were marginally down to 583,000 tonnes in July from 591,000 tonnes in the previous month, the PPAC data showed.

Diesel exports in March touched the second highest level of 3.36 million tonne, before tapering to 2.7 million tonne in the following month. They rose to 3.05 million tonne in May and fell to 2.45 million tonne in June.

The highest ever amount of diesel was exported in April 2020 when 3.4 million tonne of the fuel was shipped. Petrol exports peaked at 1.6 million tonnes in March.