Excise duty on ATF, diesel exports to safeguard domestic fuel availability, says CBIC chairman

In view of the West Asia crisis that has resulted in spiraling crude oil prices, the government on March 27 imposed duties on exports of diesel and aviation turbine fuel (ATF) to ensure sufficient domestic availability of fuel.

“ATF is a critical component and several refineries procure it internationally. The excise duty will incentivise greater supply to domestic market. Revenue gain on this account will be Rs 1,500 crore in a fortnight and the situation will be reviewed,” said Vivek Chaturvedi, Chairman, CBIC on Friday.

The finance ministry imposed a duty of Rs 21.5 per litre on exports of diesel and Rs 29.5 per litre on ATF exports to ensure adequate availability of these products for domestic consumption.

Further, the government has also reduced the central excise duty on petrol and diesel by Rs 10 per litre.

The revised duty on petrol now comes to Rs 11.90 per litre from Rs 21.90 per litre earlier while that on diesel has been reduced to Rs 7.80 per litre from Rs 17.80 per litre, Chaturvedi said.

The oil ministry however said that retail pump prices of petrol and diesel will not be changed and the duty reduction is not being passed on as a price cut at the pump. Instead, it directly reduces the under-recoveries being absorbed by oil marketing companies.

Meanwhile, the Centre has increased commercial liquefied petroleum gas (LPG) allocation to 70 percent with priority being given to sectors such as steel, dye, chemicals, automobiles and plastics.

In addition, the domestic output of LPG has jumped by nearly 40 percent, , Sujata Sharma, joint secretary at the ministry of petroleum and natural gas, said on March 27. “From March 14 till yesterday, 30,000 tonnes LPG given to commercial users,” she said.

She also said that HPCL’s Barmer refinery is at an advanced stage of completion and will start operations shortly, adding to the country’s domestic fuel output.

Sharma said the world is still in a war situation and India’s crude, LPG, LNG supplies have been affected. “Today we have sufficient crude inventories and supplies have been lined up for next two months. Situation is comfortable with LPG and LNG.”

The official highlighted that in addition to the two-months of crude oil supply already secured, the country has supplies in its refineries, terminals, and pipelines.

The oil ministry has also directed all domestic refiners to sell 50% of exported petrol and 30% of exported diesel in the domestic market.

Source from: https://www.moneycontrol.com/news/india/excise-duty-on-atf-diesel-exports-to-safeguard-domestic-fuel-availability-says-cbic-chairman-13872449.html