Reuters: India intends to extend the tax on fuel exports

The Indian government intends to extend the tax on profits from fuel exports, reports Reuters citing own sources.

An additional income tax for oil and gas companies was introduced in July last year. In addition, the authorities obligated oil companies to sell in the Indian market the equivalent of 50% of their gasoline exports and 30% of their diesel exports.

The government took this step after private companies began to actively buy Russian fuel at significant discounts, and then resell it abroad, mainly to Europe, at a much higher price. All this allowed private refinery operators to significantly increase profits. At the same time, the bias of private companies towards exports has led to a shortage of diesel and gasoline in India itself. This niche had to be filled by state oil refiners, who were forced to sell fuel at much lower prices set by the government.

Initially, the tax on profits from fuel exports was introduced for a period until March 31, 2023. “We would like to extend it … we want private companies to sell diesel and gasoline in the Indian market,” an Indian government official told Reuters. “Why should only state-owned companies suffer when all Indian refiners buy Russian oil at a discount.”

According to the agencies, the extension of the restrictive measures could be announced as early as this week.

Kirill Sarkhanyants