The Indian government cuts down heavy taxes on gasoline and other fuel exports after less than three weeks they were imposed. This provided relief to India’s top fuel exporter Reliance Industries Ltd. and top crude exporter Oil & Natural Gas Corp (ONGC).
According to a government notification, in New Delhi, the windfall tax on diesel is reduced by Rs. 2 per liter and completely removed Rs. 6 per liter tax on fuel exports. The government has also cut down the taxes on domestically produced crude by 27 percent which is Rs 17000 per tone. The news was reported first on Thursday that the government is considering lowering the taxes.
The taxes were imposed on July 1 after which India joined a growing number of nations putting windfall taxes to exploit energy companies’ benefits. But the international prices of fuel have decreased since then, dissolving profit margins at both oil producers and refiners.
The international crude prices dropped since mid-June due to concerns regarding global recession, dissolving all the profits gained during Russia Ukraine war.
According to an industry consultant FGE, in Asia, returns from the processing of gasoline and diesel have crashed in recent weeks and are expected to go down further in margins this quarter because of increased supplies.
FGE stated that Reliance and Nayara Energy Ltd. backed by Rosneft are the only privately owned refiners and consist of 80% to 85 % of the country’s overall gasoline and diesel exports.
