Duty on diesel exports hiked from Rs 21.5/L to Rs 55.5

NEW DELHI: Govt on Saturday significantly increased export duties on diesel and aviation turbine fuel to dissuade oil refiners from exporting these fuels and to ensure adequate availability in the domestic market amid ongoing tensions in West Asia.

The ministry of finance issued a series of notifications hiking the export duty on diesel by more than 150% - from Rs 21.5 per litre to Rs 55.5 per litre - with immediate effect. The levy on ATF, or jet fuel, was increased from Rs 29.5 per litre to Rs 42 per litre. The export duty on petrol continues to be nil.




Under the revised structure, the special additional excise duty on high-speed diesel has been raised to Rs 24 per litre, while the road and infrastructure cess now stands at Rs 36 per litre, which means a large chunk will now flow to the Centre.

Govt said these duties are not meant to boost revenue, but to stop fuel exporters from taking undue advantage of price differences.

The Centre had, on March 27, imposed an export duty of Rs 21.5 per litre on diesel and Rs 29.5 per litre on ATF in a bid to check windfall gains, as fuel was in short supply in international markets due to a squeeze on energy supplies amid the military conflict and export curbs imposed by China. It had also slashed excise duty on diesel and petrol to shield consumers and oil companies from the impact of high crude prices.

Retail prices of automobile fuels in India have not increased despite high volatility in the international crude market, while only a small part of the international price pressure has been passed on to domestic flights. The windfall tax on exports of diesel and ATF helps the Centre partly offset the impact of the excise duty cut.



On March 27, govt had estimated revenue gains from export duties at around Rs 1,500 crore in a fortnight. The further hike in export duties is likely to lead to higher revenue gains. In a statement, the ministry of petroleum had said, "At a time when international diesel prices have surged sharply, the levy is designed to disincentivise exports and ensure that refinery output is directed first tow-ards meeting domestic demand."
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