Stories
Windfall Tax Cut on Diesel, ATF Exports: Will Domestic Fuel Prices Drop?
- •Central government reduces windfall gain tax on export of diesel and aviation turbine fuel (ATF) effective October 1.
- •Special Additional Excise Duty (SAED) on diesel exports cut from Rs 20 to Rs 16 per liter; ATF SAED reduced from Rs 15 to Rs 10.5 per liter.
- •This tax reduction applies only to exported diesel and ATF, not affecting domestic market prices.
- •Windfall tax was imposed to prevent refineries from prioritizing exports over domestic supply amidst rising crude oil prices.
- •No change in petrol windfall tax; domestic petrol and diesel prices unlikely to decrease due to unchanged excise duty and high international crude oil prices.
Key Questions Answered
The Special Additional Excise Duty (SAED) and Road and Infrastructure Cess on diesel exports have been reduced from Rs 20 to Rs 16 per liter, while the SAED on aviation turbine fuel (ATF) exports has been lowered from Rs 15 to Rs 10.5 per liter.
No, the tax reduction applies exclusively to diesel and ATF sent abroad by refineries, and there are no changes to domestic excise duties or local taxes. Consequently, domestic fuel prices will not see any relief for now.
The government levies a windfall tax to prevent private and government refineries from pursuing super profits by exporting oil abroad instead of supplying the domestic market during periods of high crude prices. This mechanism ensures adequate fuel availability within the country and is reviewed every 15 days.
