Due to the windfall profit tax, diesel exports decreased 11% in July

29 Aug 2022 , 07:12 AM

Due to the windfall profit tax, India’s diesel exports fell by 11% in July and its overseas shipments of petrol fell by 4.5%.

On July 1, India introduced its first windfall profit tax, joining an increasing number of countries that tax energy companies’ higher-than-average profits. On gasoline and aviation turbine fuel, export tariffs of Rs6 per liter and Rs13 per liter were assessed.

Following its implementation, diesel exports decreased from 2.45 million tons in June to 2.18 million tons in July, according to PAAC data from the Oil Ministry. In a similar vein, gasoline exports decreased from 1.16 million tons in June to 1.1 million tons.

Retail outlets in various states ran out of fuel as a result of this and the fact that large consumers, such as state transport buses, queued up at state-owned oil firms’ gasoline pumps rather than paying a higher market price for direct purchase.

Normalcy was restored at the gas pumps as a result of the export levies and the regulation requiring preference for local supply over exports. Following Russia’s invasion of Ukraine in February, global oil prices skyrocketed, bringing cracks or margins on fuels like gasoline and diesel to all-time highs.

India exported 4.68 million tons of petroleum products in July, with gasoline, diesel, and ATF accounting for 82% of that total. According to the PPAC data, ATF exports decreased slightly in July from 591,000 tons to 583,000 tons.

Diesel exports peaked in March at 3.36 million tons, which was the second-highest amount ever, before declining to 2.7 million tons in April. In May, they reached a high of 3.05 million tons before dropping to 2.45 million tons in June.

When 3.4 million tons of diesel were sent in April 2020, it was the most ever exported. In March, gasoline shipments reached a milestone of 1.6 million tons.

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