India imposes tax on exports of oil products

India has imposed duties on exports of oil products to help ease fuel shortages in the country, as well as a windfall tax on domestically produced crude oil.

The government will levy a 6 rupee/litre ($0.076/l) tax each on exports of gasoline and jet fuel and Rs13/l on exports of diesel, the finance ministry said on 1 July.

"While crude prices have increased sharply in recent months, the prices of diesel and gasoline have shown a sharper increase," the ministry said. "The refiners export these products at globally prevailing prices, which are very high."

Certain refiners are drying out their pumps in the domestic market to capitalise on export gains, the ministry added. The export tax will have no implication on domestic retail prices of diesel and gasoline. Gasoline cost Rs96.72/l and diesel cost Rs89.62/l in Delhi on 1 July.

The government has additionally imposed a windfall tax of Rs23,250/t on crude produced in the country. "Domestic crude producers sell crude to domestic refineries at international parity prices," the ministry said. "As a result, the domestic crude producers are making windfall gains." But small producers with output of less that 2mn bl in the previous April 2021-March 2022 financial year are exempt from this tax.

By Pratima Pareek