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Duty on diesel export increased from Rs 21.5 per liter to Rs 55.5

New Delhi: The government on Saturday significantly increased export duty on diesel and aviation turbine fuel to prevent oil refiners from exporting these fuels amid ongoing tensions in West Asia and to ensure adequate availability in the domestic market. The Finance Ministry issued a series of notifications to increase export duty on diesel by more than 150% – from Rs 21.5 per liter to Rs 55.5 per liter – with immediate effect. The levy on ATF or jet fuel was increased from Rs 29.5 per liter to Rs 42 per litre. Export duty on petrol remains zero. Under the revised structure, the special additional excise duty on high-speed diesel has been increased to Rs 24 per litre, while the road and infrastructure cess is now Rs 36 per litre, meaning a larger portion will now go to the Centre. The government said these charges are not meant to raise revenue, but to prevent fuel exporters from taking unfair advantage of the price differential. The Center had on March 27 imposed export duty of Rs 21.5 per liter on diesel and Rs 29.5 per liter on ATF to curb windfall gains as the fuel was in short supply in international markets due to energy supply constraints amid the military conflict and export restrictions imposed by China. It had also cut excise duty on diesel and petrol to protect consumers and oil companies from the impact of higher crude oil prices. Retail prices of automobile fuel in India have not increased despite high volatility in the international crude market, while only a small part of the international price pressure has been exerted on domestic flights. The windfall tax on exports of diesel and ATF helps the Center partially offset the impact of the excise duty cut. On March 27, the government had estimated revenue gains of around Rs 1,500 crore from export duties in a fortnight. Further increase in export duty is likely to yield greater revenue gains. In a statement, the petroleum ministry had said, “At a time when international diesel prices have risen sharply, the levy is designed to discourage exports and ensure that refinery production is directed to meeting domestic demand first.“

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