The Central Government has taken a big decision regarding the export of petroleum products. According to the new order issued by the Finance Ministry, the export duty on diesel and Aviation Turbine Fuel (ATF) sent out of the country has been increased significantly. This decision is considered very important from the energy sector and economy, because it will not only affect the profits of oil companies, but will also determine the availability of fuel in the domestic market.
New rates applicable on diesel and aviation fuel
According to the official information given by the government, the duty on export of diesel has been more than doubled. Earlier, a duty of Rs 21.5 per liter had to be paid on export of diesel, which has now been directly increased to Rs 55.5 per litre. This is a huge jump. Along with this, the tax burden on Aviation Turbine Fuel (ATF) used in airplanes has also been increased. The export duty on ATF has been increased from Rs 29.5 per liter to Rs 42 per liter.
Why was this step taken?
Whenever a refinery company imports crude oil from India and refines it, it mainly has two options. Either he sells that finished fuel in the domestic market, or he earns huge profits by exporting it to the foreign market. Many times, when prices are high in the international market, companies ignore domestic demand and start selling oil abroad. To prevent this situation and to ensure adequate supply of diesel and other fuels within the country, the government imposes this export duty. Due to increase in duty, it becomes expensive for companies to export and they focus on selling their products in the domestic market only. In this way there is no shortage of oil in the country.
Relief regarding petrol
Amidst this entire process and tax increase, the most relieving news is on the petrol front. The Finance Ministry has clarified that no new tax of any kind has been imposed on the export of petrol. Export duty on petrol will remain ‘Nil’ as before. This simply means that at present the government is not afraid of any kind of crisis or shortage regarding the supply of petrol in the domestic market.