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- India Hike Export Duty On Jet Fuel, Diesel | Petrol Diesel Prices Stable
New Delhi15 minutes ago
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The central government has increased the export duty i.e. windfall tax on diesel and air turbine fuel (ATF). Export duty on diesel has been increased by ₹34 per liter to ₹55.5, which was earlier ₹21.5.
At the same time, the duty on ATF i.e. jet fuel has been increased from ₹ 29.5 to ₹ 42 per liter. The Finance Ministry issued a notification on Saturday (April 11) and implemented the new rates with immediate effect.
At the same time, export duty on petrol will remain zero for now. The general public will continue to benefit from the recent huge reduction of ₹ 10 each in excise duty on petrol and diesel.
Decision taken to increase fuel supply in domestic market
The government has taken this decision to keep the prices of petrol and diesel stable in the country. This step removes the apprehensions that petrol and diesel may become costlier in India due to the increase in cost of crude oil due to the ongoing war in the Middle East.
Its main objective is to ensure availability of fuel in the domestic market. When international crude oil prices rise, oil companies start selling fuel abroad to earn more profits. Increasing export duty makes exports expensive, due to which companies give priority to supplying to the domestic market.
Middle East tension and impact of crude oil prices
The global energy market has remained unstable for the past few months due to the ongoing military activities in the Middle East.
- 28 February: America and Israel had initiated military action against Iran, in response to which Tehran also retaliated.
- 8 April: A two-week ceasefire was agreed between Iran, America and Israel. However, this entire incident has pushed global crude oil prices significantly higher.
Excise duty and cess on high-speed diesel also increased
According to the report of Economic Times, apart from export duty, the government has also made changes in other duties.
- Excise duty on high-speed diesel has been increased to ₹24.
- With this, infra cess has been increased to ₹36.
- The total duty on jet fuel (ATF) is now ₹42 per litre.
Export duty was increased 15 days ago
Earlier on March 26, the government had revised the export duty. At that time the duty on diesel was fixed at ₹21.50 per liter and on ATF at ₹29.5 per litre. Now within just 15 days there has been a big increase in it again. Experts say that the government is keeping an eye on the fluctuations in crude oil prices in the international market and the tax rates are being reviewed on the same basis.
What is windfall tax?
Windfall tax is imposed on companies that suddenly start making very high profits due to a special situation (such as a war or a problem in the global supply chain). In India, it is imposed as ‘export duty’ to prevent oil companies from taking advantage of international prices and to fill the government treasury.
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