Sunday, August 7, 2022

Govt slaps export tax on petrol, diesel; windfall tax on domestic crude oil

The tax on exports follows oil refiners, particularly the private sector, reaping huge gains from exporting fuel to markets such as Europe and the US

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New Delhi: The government on Friday slapped a Rs 6 per litre tax on exports of petrol and ATF and Rs 13 per litre on exports of diesel. The government also slapped a Rs 23,230 per tonne additional tax on domestically produced crude oil to take away windfall gains accruing to producers from high international oil prices, a separate government notification showed.

The export duty on Aviation Turbine Fuel (ATF) or jet fuel has been raised by Re 1/litre which is set to directly impact already rising air ticket prices.

The tax on exports follows oil refiners, particularly the private sector, reaping huge gains from exporting fuel to markets such as Europe and the US. The tax on domestically produced crude oil follows local producers reaping windfall gains from the surge in international oil prices.

PSU Watch’s Point of view:

While the speculation of imposing these taxes was making a buzz since the UK government had announced a 25% windfall tax on profits of oil and gas companies, the decision by the Government of India comes at the right time to share the benefits of the unnatural rise in the crude oil prices. This will add a massive amount to the consolidated fund, will lessen the burden on the government and ensure further smoother execution of policies.

(With inputs from PTI)

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