Govt scraps petrol export tax, hikes diesel, aviation fuel duties:Move aims to secure domestic supplies amid Gulf tensions

The central government has scrapped a ₹2.50-per-litre tax on petrol exports, while raising the export duty on diesel by ₹3 per litre and on aviation turbine fuel (ATF) by 50 paise per litre. The revised duties mean companies will pay ₹11.50 per litre on diesel exports and ₹11 per litre on ATF exports. Petrol exports will no longer attract the levy. The move comes amid ongoing tensions in the Middle East, as the government seeks to ensure adequate domestic supplies of petrol and diesel by prioritising local demand over exports. Relief for the public; petrol and diesel prices will not rise International crude oil prices have risen because of the war in the Middle East, but the government has kept petrol and diesel prices stable in the country. A change in the export tax will not affect the public’s finances, and the domestic oil supply will also remain uninterrupted. The government determines this tax every 15 days after reviewing international prices. Export levy rules were implemented in March Crude oil prices had risen in the international market because of the war in the Middle East. Seeing higher profits abroad, Indian oil companies had started selling oil overseas instead of in the domestic market. To prevent this and maintain the supply of petrol and diesel in the country, the government imposed an export tax in March. Danger on the old route carrying 45% of the oil, India changed course Before the war, India imported 45% of the crude oil it needed through the Strait of Hormuz. The movement of ships along this route became dangerous because of the war in the Middle East. To ensure that supplies did not stop, India has now started importing oil from other countries. What is windfall tax? When crude oil prices suddenly rise sharply in the global market, oil companies in the country begin making huge and unexpected profits by selling petrol and diesel abroad. The government imposes a special tax on companies to bring a share of this extra profit into the national treasury. This is called windfall tax.