The Indian government raised the export taxes on gasoline, diesel, and ATF today in a move that would aid in meeting domestic demand. Fuel export taxes have increased by Rs. 6 per litre for gasoline and by Rs. 13 per litre for diesel. ATF export taxes have increased by Rs. 6 per litre. 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 gasoline in domestic markets. Additionally, the action will aid the government’s budgets as it seeks to gain from the increased crude oil prices.
Another government notification revealed that an additional tax of Rs 23,230 per tonne has been imposed on domestically produced crude oil to offset producers’ windfall profits from high international oil prices. “The cost of crude has significantly increased recently. Domestic oil producers sell their product to domestic refineries for prices that are competitive internationally. Thus, domestic crude producers are benefiting unexpectedly. A cess of Rs 23,250 per tonne has been placed on oil in consideration of this. According to the administration, imports of oil would not be subject to these excises. Small producers who produced less than two million barrels of crude annually in the previous fiscal year will not be required to pay the cess.
While private sector refineries make enormous profits by exporting petroleum to countries like Europe and the US, the tax on exports is an attempt to profit from the high crude oil prices. The tariff on domestic crude oil production comes after local producers profited handsomely from the rise in global oil prices. The government also pointed out that refiners export petroleum products at very high rates that are currently in effect globally as crude oil prices rise. It has been observed that certain refiners are drying out their pumps in the local market as exports become more lucrative.
Since the government announced a price reduction on May 21, domestic gasoline 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 both 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%.
Featured Image: Juatdial.com
💫FOLLOW US FOR MORE UPDATES. ❌WE DO NOT HAVE IRRITATING AND SPAMMY NEWSLETTERS. ✅EVERYTHING IS AND WILL BE FREE FOREVER. SEE YOU AGAIN IN YOUR STORIES AND FEED 🙂
