Fortnightly Revision Brings Relief to Fuel Exporters

Indian authorities have reduced windfall taxes on outbound shipments of diesel and aviation turbine fuel while scrapping the export duty on petrol entirely. Effective Saturday, the export levy on diesel drops to Rs 24 per litre from the previous Rs 25.5 per litre. Similarly, the tax on aviation turbine fuel (ATF) exports has been lowered to Rs 19.5 per litre from Rs 22 per litre. In a significant boost for outbound fuel trade, the duty on petrol exports now stands at zero, down from Rs 3.5 per litre.

Balancing between Energy Security and Refiner Margins

New Delhi conducts these duty adjustments every two weeks based on two-week rolling averages of international oil prices. India initially launched this windfall tax regime in July 2022 to absorb supernormal gains earned by refiners during sharp international crude rallies. The levy ensures adequate domestic supplies while preventing private refiners like Reliance Industries and Nayara Energy from diverting essential fuels solely to overseas markets during global shortages. Major oil companies with coastal refining setups, including key processing hubs connected to Paradip and western coastal ports, track these fortnightly revisions closely to optimize their crack spreads. With international energy markets stabilizing slightly after intense geopolitical tensions in the Middle East, the lowered tariffs offer breathing room to Indian refiners looking to clear processing inventories without eroding profit margins.