Windfall tax on exports of petrol was increased from ₹0.50 to ₹2.50 per litre, while duty on diesel was reduced from ₹16 to ₹8.50 per litre; No change in excise duty for domestic market
The Central Government has changed the rates of windfall tax on export of petroleum products. Under the new system implemented from October 16, the duty on export of petrol has been increased to ₹ 2.50 per liter. At the same time, the duty on export of diesel has been reduced to ₹ 8.50 per liter. Duty on export of aviation turbine fuel (ATF) has been retained at ₹ 10.50 per litre.
In this change made under the notification of the Finance Ministry, the duty on export of petrol has increased five times from the earlier ₹ 0.50 per liter. On the other hand, the duty on diesel was earlier ₹16 per litre, which has been reduced to almost half.
No decision to change prices at petrol pumps
This decision of the government does not directly mean that the retail prices of petrol or diesel in the country are going to increase or decrease. The new rates are applicable to exported petroleum products. There is no change in the existing excise duty on petrol and diesel sold for domestic consumption under this change.
Therefore, it would not be right for motorists to see this decision as an announcement of immediate change in the prices of petrol and diesel. Retail prices at local pumps are determined by the pricing arrangements of individual oil marketing companies.
Tax is linked to international market conditions
Windfall tax or windfall profits tax is used at times when price fluctuations in the international market are likely to yield extraordinary profits to exporters. The objective of imposing export duty on petroleum products is to maintain the availability of fuel in the domestic market and to discourage the tendency to take unfair advantage of the price difference in the international market.
The government is reviewing export duty rates on petroleum products amid ongoing tensions in West Asia and uncertainty in the global energy market.
Rates are reviewed every fortnight.
The duty rates applicable on exports of petrol, diesel and aviation fuel are generally reviewed every fortnight. The government can revise these rates keeping in mind the changes in international crude oil and petroleum products prices.
In the latest change, the export duty on petrol has been increased, while the duty on diesel has been reduced. For domestic consumers, at present there is no change in the excise duty of petrol and diesel due to this notification.