On Monday, the government increased the windfall gains tax on diesel and aviation turbine fuel (ATF) exports while keeping the gasoline tax in place for the two weeks starting on June 16. Diesel exports will now pay a special additional excise duty (SAED) of Rs 14 per liter instead of the current rate of Rs 13.5 per litre. SAED for ATF exports will increase from Rs 9.5 to Rs 12.5 per litre.
The tariff rate on gasoline exports remains at Rs 1.5 per litre and has not changed. The tariff increases will take effect on June 16, according to a statement from the Finance Ministry. Additionally, the current duty rates on gasoline and diesel approved for domestic use remain unchanged.
The government set an export duty on diesel and ATF on March 26 and updated the rate every two weeks amid rising tensions in West Asia brought on by the US-Israel attack on Iran and widespread retaliation. It imposed an export tax on gasoline on May 16.
In the midst of the West Asian conflict, the windfall tax was imposed to boost domestic fuel availability.
Since crude oil prices have increased significantly since the start of the war, the action is intended to prevent exporters from taking unfair advantage of price disparities. In light of the West Asia crisis, the windfall tax is intended to ensure that petroleum products are available domestically by discouraging exports.
FAQs: Government Hikes Export Duty on Diesel and Jet Fuel
1. What changes has the government made to export duties?
The government has increased the Special Additional Excise Duty (SAED) on diesel exports from ₹13.5 per litre to ₹14 per litre and on aviation turbine fuel (ATF) exports from ₹9.5 per litre to ₹12.5 per litre. The export duty on gasoline remains unchanged at ₹1.5 per litre.
2. When will the new export duty rates come into effect?
The revised export duty rates will be effective from June 16.
3. Has the export duty on petrol (gasoline) changed?
No. The export duty on gasoline continues to remain at ₹1.5 per litre without any changes.
4. Are domestic fuel prices affected by this decision?
No. The current excise duty rates on petrol and diesel sold in the domestic market remain unchanged. The revised duties apply only to exports.
5. Why has the government increased the windfall tax?
The government raised the windfall tax to ensure adequate fuel availability in India and discourage excessive exports as global crude oil prices surged due to escalating tensions in West Asia.
6. What is the Special Additional Excise Duty (SAED)?
SAED, commonly known as the windfall tax, is a special tax imposed on fuel exports when international oil prices rise sharply, allowing producers to earn unusually high profits.
7. Why are export duty rates reviewed every two weeks?
The government reviews export duties every fortnight to respond to changes in global crude oil prices and market conditions, ensuring a balance between domestic fuel supply and export profitability.
8. When was the windfall tax first introduced?
The government imposed export duties on diesel and aviation turbine fuel (ATF) on March 26, while an export duty on gasoline was introduced on May 16.
9. How does the export duty impact fuel exporters?
Higher export duties increase the cost of exporting diesel and ATF, making exports less profitable and encouraging refiners to prioritize domestic fuel supplies.
10. What is the main objective of the government’s latest move?
The primary objective is to maintain sufficient fuel availability within India, stabilize the domestic market, and prevent exporters from benefiting excessively from higher international fuel prices during the ongoing geopolitical crisis in West Asia.
