Export tax on diesel, ATF up; windfall levy on domestic oil hiked

New Delhi: The government on Thursday raised the tax on the export of diesel and jet fuel (ATF) and hiked the windfall profit levy on domestically-produced crude oil in line with rising product margins and oil prices. At the fourth fortnightly review, the government raised the windfall profit tax on the export of diesel to Rs 13.5 per litre from Rs 7 per litre.

The tax on Aviation Turbine Fuel (ATF) exports too has been hiked to Rs 9 from Rs 2 per litre with effect from September 1 , according to a finance ministry notification issued late Wednesday night.

Alongside, the tax on domestically-produced crude oil too has been hiked to Rs 13,300 per tonne from Rs 13,000. The new levies come into effect from Thursday, September 1.

The recovery in oil prices in the second half of August as compared to the first fortnight of the month led to a slight upward revision in windfall taxes on domestic oil production. These are now $22.8 per barrel, up from $22 previously.

"The adjustments, while still ad hoc, highlight the producer oil price cap of $70-75 per barrel and profitability of $20-21 a barrel," Morgan Stanley said in a note.

The export tax on diesel and jet fuel was raised by $17 per barrel and $14 to $27 a barrel and $18, respectively, as refinery margins for these products have risen.