Government Hikes Export Duties on Diesel and ATF
The Indian government has announced a significant increase in the Special Additional Excise Duty (SAED) levied on the export of diesel and Aviation Turbine Fuel (ATF). Effective June 16, the export duty on diesel has been raised to Rs 14 per litre from the previous Rs 13.5 per litre. Similarly, the duty on ATF exports climbed to Rs 12.50 per litre, up from Rs 9.50 per litre. The export duty on petrol, however, remains unchanged at Rs 1.5 per litre.
Impact on Key Refiners
This policy adjustment immediately brings major Indian refiners into sharper focus, particularly those heavily involved in the production and export of diesel and ATF. Companies such as Reliance Industries, Chennai Petroleum, and Mangalore Refinery and Petrochemicals Ltd (MRPL) are directly impacted by these revised levies. In the previous trading session, shares of Reliance Industries closed 1.11% higher, Chennai Petroleum saw a 6.58% increase, and MRPL ended 4.97% higher, indicating market reaction to the evolving duty structure.
Rationale Behind the Levy
The government's decision to implement and periodically revise these export levies, including the SAED and Road and Infrastructure Cess (RIC), dates back to March 27. The primary objective behind these measures is to ensure adequate domestic availability of petroleum products. By disincentivising exports through higher duties, the government aims to prioritise national supply, a strategy deemed crucial amidst global energy uncertainties and the ongoing West Asia crisis. The rates are subject to fortnightly reviews, aligning them with average international prices of crude oil, petrol, diesel, and ATF.
Ensuring Domestic Supply and Energy Conservation
Amidst these duty adjustments, the Petroleum Ministry has reassured the public regarding the country's fuel security. A recent inter-ministerial briefing confirmed that India maintains adequate supplies of petrol, diesel, LPG, and natural gas to meet current domestic demand. Joint Secretary Sujata Sharma urged both citizens and businesses to exercise judicious energy consumption and advised large industrial and commercial consumers to procure diesel through dedicated pumps, aiming to alleviate pressure on retail fuel stations.