New Delhi: With the government's windfall tax kicking in, diesel exports from the country declined by 11 per cent in July and overseas shipment of petrol dropped by 4.5 per cent, official data showed.
Realising a shortage of fuels in the country due to exports, the government imposed windfall taxes on domestic crude and some petroleum products from July 1 this year, joining a growing number of nations that taxes super normal profits of energy firms. Export duties of Rs 6 per litre were levied on petrol and aviation turbine fuel and Rs 13 a litre on diesel.
The duties on windfall tax were partially adjusted in three rounds -- first on July 20, second on August 2 and third one on August 19, and have now been removed for petrol, with Rs 7 per litre and Rs 2 per litre remaining for diesel and ATF, respectively.
The data from the Oil Ministry's Petroleum Planning and Analysis Cell (PAAC) showed that diesel exports dropped to 2.18 million tonnes in July from 2.45 million tonnes a month back. Similarly, petrol exports fell to 1.1 million tonnes from 1.16 million tonnes in June, the data showed.
In July, India exported 4.68 million tonnes of petroleum products, 82 per cent of which was petrol, diesel and ATF. ATF exports were marginally down to 583,000 tonnes in July from 591,000 tonnes in the previous month, the PPAC data showed.
Similarly, diesel exports in March touched the second highest level of 3.36 million tonnes, before tapering to 2.7 million tonnes in the following month. They rose to 3.05 million tonnes in May and fell to 2.45 million tonnes in June.
The highest ever amount of diesel was exported in April 2020 when 3.4 million tonnes of the fuel was shipped, and petrol exports peaked at 1.6 million tonnes in March.
The export duties and regulation mandating preference to local supplies over exports brought normalcy at petrol pumps. International oil prices shot up following Russia's invasion of Ukraine in February, sending cracks or margins on petrol and diesel to record highs.
However, the export levies helped ease the strain on domestic fuel supply. The levies were aimed at deterring firms like Reliance Industries and Rosneft-backed Nay-ara Energy from choosing overseas markets for the fuel they make instead of supplying locally.
When state-owned fuel retailers Indian Oil Corp, BPCL and HPCL that control 90 per cent of the market decide to sell petrol and diesel at substantial losses to help government curb inflation, private fuel retailers chose international market to sell fuel.
This together with bulk buyers like state transport buses queuing up PSU oil companies' pumps instead of paying a higher price for direct purchase, led to a shortage in retail outlets....