The Centre on Friday raised taxes on the export of petrol, diesel and aviation turbine fuel (ATF), and also announced an additional windfall tax on gains made by domestic refineries.
The government levied a Rs 6 per litre tax on exports of petrol & ATF, and Rs 13 per litre on exports of diesel.
It imposed Rs 23,230 per tonne additional tax on domestically produced crude oil, to take away partial windfall gains accruing to producers from the surge in international oil prices.
However, refineries that deal with export have been exempted from the latest notification regarding domestic sales. The new order demands that exporters sell 30% of their diesel output and 50% of their petrol in domestic markets first.
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The tax on exports follows oil refiners, particularly the private sector, reaping huge gains from exporting fuel to markets such as Europe and the United States. The tax on domestically produced crude oil follows local producers reaping huge gains from high oil prices in the international market.
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Meanwhile, domestic petrol and diesel prices have been steady since May 21 when the government announced a slashprices. Domestic prices are likely to remain low as the latest announcement on export taxes do not impact domestic fuel prices.
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Due to the restrictions for domestic oil refineries from export oil, shares of private and public refining companies were seen tumbling with Reliance Industries stock falling more than 5%.