India cuts windfall tax on local crude sales, fuel exports

India has cut a windfall tax on oil producers and refiners and exempted gasoline from an export levy, less than three weeks after it imposed the two charges.

Shares in oil companies that will benefit from the move rose. Reliance Industries jumped 4.3 per cent, Oil India 8.8 per cent, Oil and Natural Gas Corp 6.8 per cent and Vedanta 4.3 per cent.

The government said in a statement an export tax of 6 rupees a litre no longer applied to gasoline. It had also reduced duty on diesel and aviation-fuel exports by 2 rupees a litre to 10 rupees and 4 rupees a litre, respectively, it said.

ALSO READ — India’s export curbs, tax hike to exacerbate global diesel, gasoline shortage

A windfall tax on domestically produced crude oil was cut to 17,000 rupees a tonne from 23,250 rupees.

Removal of the charge on gasoline will particularly benefit Reliance's 7,04,000-barrel-per-day export-focused refinery at Jamnagar in Gujarat state.

All changes took effect on July 20.

ALSO READ — India imposes windfall tax on oil producers, fuel exporters

On July 1, India imposed the windfall tax on crude oil producers and levies on exports of gasoline, diesel and aviation fuel after private refiners turned to overseas sales to gain from robust refining margins instead of selling at lower-than-market rates in the country.

Global crude oil prices and refining margins for gasoline, gasoil and jet fuel have eased since imposition of the taxes.