The government has hiked the Special Additional Excise Duty (SAED) on the export of petroleum products. In the review for the fortnight (15-day period) beginning June 16, the duty on the export of diesel and Aviation Turbine Fuel (ATF) has been raised. This change has come into effect today. The government’s objective is to ensure adequate availability of petroleum products in the domestic market amidst the crisis in West Asia. There has been no change in the export duty on petrol or the existing duties on diesel and petrol meant for domestic consumption.
How much has the duty increased?
According to the new rates, the duty on diesel exports has been raised from ₹13.05 per litre to ₹14.00 per litre. Meanwhile, the SAED on ATF exports has been increased from ₹9.05 per litre to ₹12.05 per litre. The export duty on petrol remains unchanged at ₹1.05 per litre.
No revisions have been made to the existing duty rates on petrol and diesel sold in the domestic market, meaning there will be no direct impact on ordinary consumers.
What is the purpose of this duty?
The government introduced export duties on petroleum products on March 27. The aim was to discourage overseas shipments and prioritize supply for the domestic market. Ongoing tensions in West Asia have put pressure on the crude oil supply chain.
Consequently, the government does not want refinery companies to increase exports of diesel and ATF in pursuit of higher profits, which could lead to a shortage in the domestic market. This hike in SAED is part of a fortnightly review that assesses international prices and the domestic supply-demand situation.
The government’s focus
Experts believe that the hike in export duty could impact the margins of oil marketing companies, but the availability of diesel and jet fuel in the domestic market will remain secure. The government’s focus is clear: domestic needs must be met first, even if prices in the international market are attractive. Amidst fears that the West Asia crisis could be prolonged, this move is seen as significant for strengthening energy security. A further revision of rates is possible during the review in the coming fortnight, depending on international conditions and crude oil prices.
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