Reduction in windfall tax on fuel exports:Duty on petrol slashed to zero, ₹24/l on diesel ₹19.5/l on jet fuel

The central government has reduced the windfall tax levied on exports of petrol, diesel and aviation fuel i.e. ATF. The new rates have come into effect from August 15. According to the notification issued by the Finance Ministry, the tax on petrol exports has been completely eliminated i.e. made ‘zero’, while relief has been given in duties on diesel and jet fuel. How much reduction on which fuel The Special Additional Excise Duty i.e. SAED on diesel exports has been reduced from Rs 25.5 per litre to Rs 24 per litre. Similarly, the export duty on ATF has been reduced from Rs 22 per litre to Rs 19.5 per litre. The biggest relief has been on petrol exports. The tax of Rs 3.5 per litre imposed on August 3 has now been reduced to zero. What will be the impact on petrol diesel prices in the domestic market? The Finance Ministry has clarified that there has been no change in the current duty rates on petrol and diesel sold to common consumers within the country. Fuel prices in the domestic market will remain as before. This decision will only apply to refineries and companies exporting fuel abroad. What is windfall tax and why was it imposed? Due to ongoing tensions and war-like situations in the Middle East, crude oil prices in the international market had increased significantly. During this period, Indian oil refining companies were making profits by selling oil at higher prices in foreign markets instead of supplying to the domestic market. To control these profits and ensure fuel availability within the country, the government first imposed a tax on exports of diesel and ATF on March 27. Subsequently, this tax was also implemented on petrol exports from May 16. Review happens every 15 days The government assesses crude oil prices and refining margins in the international market every 14-15 days. If there is a softening in crude oil and refining margins in the global market, the windfall tax is reduced.