Comments
India’s diesel exports in July 2022 fell to its lowest levels in the last 14 months, since May 2021, to 2.18 million tonnes (MT), largely on account of the government imposing windfall profit tax on outbound shipments of high speed diesel (HSD).
As per data from the Petroleum Planning and Analysis (PPAC) cell, diesel exports in July 2022 were down 11 per cent month-on-month and 4 per cent on an annual basis.
Also read
Analysing data from PPAC shows that during April 2021, India’s diesel exports hit a record low of 1.88 MT due to the pandemic, which lead to a worldwide lockdown thereby impacting demand for auto fuels. In comparison, a year-ago during the same month, the exports were the highest at 3.40 MT.
Post April 2021, exports started picking up in anticipation of a decline in the pandemic’s intensity. Between May 2021 to June 2022, the highest export was recorded in March 2022 at 3.37 MT, while the lowest was in February this year at 2.42 MT.
July exports
Diesel export data for July shows that shipment numbers in 2022 were the sixth lowest since 2011. The lowest exports for July were recorded in 2014 at 1.35 MT, while the highest was reported in 2019 at 2.61 MT.
July 2015 diesel exports were similar to the outbound shipments recorded in the same month seven years later.
Making exports costly
On July 1, 2022, the government for the first time imposed the windfall profit tax in a bid to enhance the domestic supply of diesel as well as to deter companies such as Reliance Industries and Nayara Energy from exporting diesel to other countries at huge profit margins. India followed a host of countries to tax energy companies making abnormal profits.
On July 1, export duties of ₹6 per litre ($12 per barrel) were levied on petrol and ATF, and a ₹13 per litre tax on the export of diesel ($26 a barrel). A ₹23,250 per tonne windfall profit tax on domestic crude production ($40 per barrel) was also levied.
In the fourth fortnightly review on August 31, the windfall profit tax on export of diesel was raised to ₹13.5 per litre and jet fuel exports to ₹9 a litre, besides raising the levy on domestically-produced crude oil in line with hardening global prices.
Under recoveries
State-run oil marketing companies (OMCs), which control almost 90 per cent of the domestic retail market, have not raised prices of petrol and diesel in a bid to help tame the high inflation. This is leading to under recoveries, but company officials say that the situation in temporary and crude oil prices will soften by the end of the year.
“OMCs have incurred a cumulative loss (before tax) for the first quarter of FY23 amounting to ₹23,799 crore, as against a profit before tax of ₹14,642 crore in the fourth quarter of FY22. This loss is on account of under-recoveries in petrol, diesel and LPG,” the Ministry of Petroleum and Natural Gas (MoPNG) said.
During July 2022, the price of Indian Basket of crude oil varied between $99.76 per barrel and $112.42, with the average price as $105.49 per barrel, which is 9.07 per cent lower than the average price of $116.01 per barrel in June 2022.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.