India increases profit tax on export of diesel, jet fuel

India today (October 15, 2022) announced an increase in the windfall profit tax on the export of diesel and jet fuel with effect from October 16 in a move that will make the two products costlier.

The levy on domestically produced crude oil too has been increased by Rs 3,000 per tonne to Rs 11,000, reports our New Delhi correspondent.

After lowering the tax rates for two consecutive fortnights in sync with a fall in global crude prices, the Indian Finance Ministry has brought about a hike in export taxes on crude, diesel and ATF, in its latest review.

At the seventh fortnightly review, the government raised the windfall profit tax on the export of diesel to Rs 12 per litre from Rs 6.5 a litre, and brought back the levy on Aviation Turbine Fuel exports at Rs 3.50 per litre, from nil, the ministry said in a notification.

While private refiners Reliance Industries Ltd and Rosneft-based Nayara Energy are the principal exporters of fuels like diesel and ATF, the windfall levy on domestic crude targets producers like state-owned Oil and Natural Gas Corporation (ONGC) and Vedanta Ltd.

India had first imposed windfall profit taxes on July 1, joining a growing number of countries that tax super normal profits of energy companies. But international oil prices have cooled since then, eroding the profit margins of both oil producers and refiner.