Govt raises windfall tax on diesel, ATF exports from June 16; Brent crude rebounds above $83

The Centre has hiked the windfall gains tax on exports of diesel and aviation turbine fuel (ATF) for the fortnight beginning June 16 while retaining the existing levy on petrol exports. 

According to a notification issued by the Finance Ministry on Monday, the special additional excise duty (SAED) on diesel exports has been raised to ₹14 per litre from ₹13.5 per litre. The levy on ATF exports has been increased to ₹12.5 per litre from ₹9.5 per litre. 

The duty on petrol exports remains unchanged at ₹1.5 per litre. The revised rates came into effect from June 16, the notification said. 

There has been no change in the duty structure applicable to petrol and diesel supplied for domestic consumption. 

The government had first imposed export duties on diesel and ATF on March 26 amid escalating tensions in West Asia following military hostilities involving Iran, Israel and the United States. The rates have since been reviewed and revised on a fortnightly basis in line with developments in global energy markets. 

On May 16, the government extended the windfall tax regime to petrol exports as well. 

The export duties were introduced to ensure adequate domestic availability of petroleum products and prevent exporters from benefiting disproportionately from higher international fuel prices triggered by the conflict in West Asia. 

Crude oil prices today 

Meanwhile, the global crude oil prices rebounded on Tuesday after falling in the previous session following reports of a US-Iran agreement aimed at resolving tensions through a proposed peace deal. 

The recovery in prices was driven by lingering concerns over how quickly oil supplies and energy shipments through the Strait of Hormuz would return to normal levels despite the diplomatic breakthrough. 

Brent crude futures rose 26 cents, or 0.3%, to $83.42 per barrel while US West Texas Intermediate (WTI) crude gained 46 cents, or 0.3%, to $81.12 per barrel. 

Oil prices had earlier slipped to around $83 per barrel after US President Donald Trump said a memorandum of understanding on peace between the US and Iran was expected to be signed on Friday. 

While the announcement sparked a strong rally in global equity markets, investor sentiment continues to hinge on the successful implementation of the proposed peace agreement and the restoration of normal energy flows in the region.