India has nearly halved its export duty on diesel for the next two weeks while it hiked the levy on gasoline exports fivefold, effective October 16.
The lower diesel export levy could encourage additional supply to the international market, which is reeling from a diesel crunch and price shocks, while the hike in the gasoline export duty appears to be intended to discourage gasoline exports.
India reviews its export duty policy every fortnight to account for the prevailing domestic and international market conditions, including supply and prices. These duties were introduced in March at the height of the Middle East crisis when no supplies are moving through the Strait of Hormuz.
Back then, India moved to protect its fuel supply and consumers by reducing domestic taxes on gasoline and diesel and imposing a levy on fuel exports. The export levies have been reviewed and revised every two weeks since then.
For the next two weeks starting October 16, excise duties on gasoline and diesel sold in the domestic market have not been changed, but the duties on exports have been revised.
The gasoline export duty was hiked to 2.5 rupees ($0.026) per liter, up from 0.5 rupees in the first half of October.
The export duty on jet fuel was left unchanged at 10.5 rupees, or $0.11, per liter.
The export levy on diesel, however, was slashed from 16 rupees ($0.17) per liter to 8.5 rupees, or $0.09, for the next two weeks.
Amid the global diesel crisis, India’s Oil Minister Hardeep Puri said last month that the country would keep exporting diesel to help meet global demand and ease the fuel crunch.
“We honor our commitments,” the minister said at an industry event in New Delhi in September, noting that India’s refining capacity continues to expand thanks to years of investments.
By Tsvetana Paraskova for Oilprice.com
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