India’s diesel exports fell by 11 per cent in July and overseas shipment of petrol dropped by 4.5 per cent after the government slapped a windfall profit tax on such sales, according to data.
Diesel exports dropped to 2.18 million tonnes (mt) in July from 2.45 mt a month back, data from the Oil Ministry’s Petroleum Planning and Analysis Cell (PPAC) showed.
Similarly, petrol exports fell to 1.1 mt from 1.16 mt in June.
India imposedwindfall profit taxes on July 1, joining a growing number of nations that taxes super normal profits of energy companies. Export duties of ₹6 per liter were levied on petrol and aviation turbine fuel and ₹13 a liter on diesel.
The duties were partially adjusted in three rounds, and have now been removed for petrol, with ₹7 per litre and ₹2 per litre remaining for diesel and ATF, respectively.
The export levies helped ease the strain on domestic fuel supply. The levies were aimed at deterring firmslike Reliance Industries Ltd and Nayara Energy from choosing overseas markets for their fuel they make instead of supplying locally.
Out of fuel
With state-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd(BPCL) and Hindustan Petroleum Corporation Ltd(HPCL), which control 90 per cent of the market, deciding to sell petrol and diesel at substantial losses to help government curb inflation, private fuel retailers choose international market to sell fuel instead of selling locally at loss.
This, together with bulk buyers queuing up state-owned oil companies’ petrol pumps instead of paying a higher market price for direct purchase, led to retail outlets in several states running out of fuel.
International oil prices shot up following Russia’s invasion of Ukraine in February, sending cracks or margins on fuels like petrol and diesel to record highs.
In July, India exported 4.68 million tonnes 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 mt, before tapering to 2.7 mt in the following month. They rose to 3.05 mt in May and fell to 2.45 mt in June.
The highest ever amount of diesel was exported in April 2020 when 3.4 mt of the fuel was shipped. Petrol exports peaked at 1.6 mt in March.
August 28, 2022