As the trade gap elevates to a record high, the central government on Thursday, August 18th, 2022 amplified the newly-introduced windfall tax on diesel export to ₹ 7 per litre from ₹ 5 per litre earlier in its third round of revision. Along the same line and length, the government increased the tax on export of Aviation Turbine Fuel (ATF) to around ₹ 2 per litre.
According to sources, the notified changes will be brought into effect from August 19, 2022.
However, in its recent notification, the Central Board of Excise and Customs (CBIC), has brought down the windfall tax on crude oil produced within the country. Earlier, the price was nearly ₹ 17,750 a tonne, which has decreased to around ₹ 13,000 a tonne in the current financial year. It is seen as a relief for India-based oil producers like ONGC and Vedanta.
The changes in the export of petroleum resources remained void.
The government had imposed its first windfall taxes on July 1 to enlist itself in the growing number of nations that taxes super normal profits of energy companies.
The export duties of ₹ 6 per litre were levied, which is USD 12 per barrel (internationally) were charged on petrol and nearly ₹ 13 per litre (USD 26 per barrel) were levied on diesel. The domestic crude production observed an increase in windfall tax of approximately ₹ 23,250 per tonne.
In the following month, on August 2, the export tax on diesel was reduced to ₹ 5 per litre and tax on ATF was annulled. This led to a sudden collapse in cracks and refinery margins. However, the duty on domestically-produced crude oil was elevated to ₹ 17, 750 per tonne.
In recent months, the gap between export-import has broadened from USD 26.18 billion to USD 31.02 billion. Import has jumped from 43.59 per cent in July (a little higher than what was seen last year) and the exports had dropped to 0.76 per cent.
A recent release from a premier news agency, quoted- ‘International oil prices have since then slid to below USD 95 per barrel but cracks on diesel and ATF rose. Industry sources said the government is working on a principle to leave some healthy margins, with both crude oil producers and refiners and taxing gains over and above that.’