Govt cuts windfall tax on fuel exports as global crude oil prices fall

India imposed the taxes on July 1, joining a growing number of nations placing windfall levies to tap energy companies' booming profits

oil
Siddhartha Singh and Debjit Chakraborty | Bloomberg
2 min read Last Updated : Jul 20 2022 | 6:43 AM IST
India eliminated a levy on gasoline exports and cut windfall taxes on other fuels less than three weeks after they were imposed, offering relief for the nation’s No. 1 fuel exporter Reliance Industries Ltd. and top crude explorer Oil & Natural Gas Corp.

New Delhi reduced the windfall tax on diesel and aviation fuel shipments by Rs 2 a liter, and scrapped completely a Rs 6-per-liter levy on gasoline exports, according to a government notification. It also cut the tax on domestically produced crude by about 27% to Rs17,000 a ton. Bloomberg News first reported Thursday that the government was considering lowering the taxes.

India imposed the taxes on July 1, joining a growing number of nations placing windfall levies to tap energy companies’ booming profits. But international fuel prices have cooled since then, eroding profit margins at both oil producers and refiners.

International crude prices have slumped since mid-June on concerns about a potential global recession, at one point erasing all the gains that followed Russia’s invasion of Ukraine. Returns from processing gasoline and diesel in Asia have plunged in recent weeks, with industry consultant FGE expecting a further decline in margins this quarter due to increased supplies. 

Reliance and Rosneft-backed Nayara Energy Ltd., India’s only privately owned refiners, make up 80% to 85% of India’s overall gasoline and diesel exports, according to FGE.

One subscription. Two world-class reads.

Already subscribed? Log in

Subscribe to read the full story →
Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

Topics :Crude Oil PriceCrude OilReliance IndustriesONGC

Next Story