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Source: Nanfang Daily Online Edition     time: 2022-07-04 16:08:35

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Shoot the goal

  Central Government slaps tax on petrol, diesel exports; imposes windfall tax on crude oil

Central Government slaps tax on petrol diesel exports imposes windfall tax on crude oil, latest busi
Image Source : PTI/ REPRESENTATIONAL (FILE).

The government imposed a Rs 6 per litre tax on export of petrol and ATF and Rs 13 per litre tax on export of diesel, finance ministry notifications showed.

 

Highlights

  • Government imposed a Rs 6 per litre tax on export of petrol and ATF
  • Additionally, govt levied a Rs 23,250 per tonne additional tax on crude oil produced domestically
  • The levy on crude will fetch govt Rs 67,425 crore annually on 29 million tonnes of crude oil

Business news: The government on Friday (July 1) slapped an export tax on petrol, diesel and jet fuel (ATF) shipped overseas by firms like Reliance Industries Ltd, and imposed a windfall tax on crude oil produced locally by companies such as ONGC and Vedanta Ltd.

The government imposed a Rs 6 per litre tax on export of petrol and ATF and Rs 13 per litre tax on export of diesel, finance ministry notifications showed.

Additionally, it levied a Rs 23,250 per tonne additional tax on crude oil produced domestically.

The levy on crude, which follows record earnings by state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) and private sector Cairn Oil & Gas of Vedanta Ltd, alone will fetch the government Rs 67,425 crore annually on 29 million tonnes of crude oil produced domestically.

The export tax follows oil refiners particularly Reliance Industries and Rosneft-backed Nayara Energy making a killing in exporting fuel to deficit regions such as Europe and the US in the aftermath of Russia's invasion of Ukraine.

The refiners are said to have processed Russian crude oil available at discount after it was shunned by the west, and exported fuel produced from it to Europe and the US.

The restriction on export is also aimed at shoring up domestic supplies at petrol pumps, some of which had dried up in states like Madhya Pradesh, Rajasthan and Gujarat as private refiners preferred exporting fuel than selling locally.

Exports were preferred as retail petrol and diesel prices by dominant PSU retailers have been capped at rates way lower than cost.

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This meant that private retailers, who control less than 10 per cent of the market share, either sell fuel at loss or lose market share if they were to sell at higher cost.

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