India cuts fuel export taxes, hikes tax on local crude

August 3, 2022 1:05 pm

A worker checks a 500 Indian rupee note as a man fills diesel in containers at a fuel station in Kolkata, India, August 14, 2018. [Source: Reuters]

India has cut fuel export taxes for the second time in less than two weeks and increased a windfall tax on locally produced crude oil, a government notification on Tuesday said.

India cut export taxes on jet fuel to zero from 4 rupees per litre and diesel to 5 rupees per litre from 11 rupees per litre, the finance ministry notification said.

The changes will be effective from Wednesday.

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India, which is the world’s third largest oil importer, on Tuesday also raised the tax on domestically produced crude to 17,750 rupees ($226.14) per tonne from 17,000 rupees per tonne, the government notification said.

India imposed a windfall tax on July 1 on crude oil producers, along with levies on gasoline, diesel and aviation fuel exports.

But on July 20 it said it would cut the windfall tax on oil producers and levies on refiners, and fully exempted gasoline from an export duty.

A top finance ministry official told Reuters last month that the Indian government will only withdraw the windfall tax for oil producers and refiners if global prices of crude fall as much as $40 a barrel from present levels.