July Sees 11% Drop In Diesel Exports Due To Windfall Profit Tax Implementation
Official data revealed that India experienced an 11 per cent decrease in diesel exports and a 4.5 per cent drop in petrol exports during July. This decline was attributed to the implementation of a windfall profit tax by the government on such sales.
According to the Petroleum Planning and Analysis Cell (PPAC) under the Oil Ministry, diesel exports fell from 2.45 million tonnes in the previous month to 2.18 million tonnes in July. Similarly, petrol exports decreased from 1.16 million tonnes in June to 1.1 million tonnes.
The windfall profit tax, which came into effect on 1 July, imposed export duties of Rs six per litre on petrol and aviation turbine fuel, along with Rs 13 per litre on diesel. The tax was aimed at discouraging companies like Reliance Industries and Nayara Energy, backed by Russia's Rosneft, from opting to sell their fuel in overseas markets rather than supplying domestically.
To alleviate strain on domestic fuel supply, the export levies were adjusted in multiple stages on 20 July, 2 August, and 19 August. The levies have now been eliminated for petrol, while Rs seven per litre and Rs two per litre remain for diesel and ATF (aviation turbine fuel), respectively.
These tax measures were successful in bringing about stability at petrol pumps, as they prompted a preference for local supplies over exports. The situation was exacerbated by international oil prices surging due to Russia's invasion of Ukraine in February, resulting in record-high margins for fuels like petrol and diesel.
During July, India exported a total of 4.68 million tonnes of petroleum products, with 82 per cent consisting of petrol, diesel, and ATF. While ATF exports saw a slight decrease from 591,000 tonnes in the previous month to 583,000 tonnes in July, diesel exports exhibited fluctuating patterns in the months leading up to July.
Notably, the highest level of diesel exports was recorded in March at 3.36 million tonnes, which gradually declined to 2.45 million tonnes in June. Similarly, petrol exports reached their peak at 1.6 million tonnes in March 2023.
