A year after imposing restrictions, the government has now extended the curbs on the export of diesel and petrol to ensure the availability of refined fuel in the domestic market. A government notification says oil refiners must sell at least 50% of their annual volume of petrol exports and 30% of their diesel exports in the domestic market.
The move may also be aimed at discouraging the import of Russian oil for export to other nations, including many EU countries, by private oil companies. The curbs were first put in place after the Russia-Ukraine war that started on February 24, 2023, as the non-state refiners started taking advantage of cheap oil coming from Russia to garner maximum profit.
Two weeks back, the government slashed the windfall tax on domestically produced crude oil to ₹3,500 per litre from ₹4,400 per litre. The export duty on diesel was hiked to ₹1 per litre from ₹0.50 per litre, while the export duty on petrol and aviation turbine fuel was exempted.
The tax rates are revised every fortnight based on prevailing international rates. Notably, Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) together control 90% of the fuel retailing network in the country.
The government earlier said the prices of petrol and diesel have not been increased by public sector oil marketing companies (OMCs) since April 6, 2022, despite record-high international prices. As a result, the three state-run fuel retailers — IOC, BPCL and HPCL — booked a combined loss of ₹27,276 crore in the first six months of FY23, against the combined profit before tax of ₹28,360 crore in the first half of the financial year 2021-22.
Meanwhile, the shares of two state-run oil retailers— BPCL and HPCL — were trading lower on Monday, while the Indian Oil stock is trading slightly up at 0.064%.
Shares of ONGC, the country’s largest oil and gas producer, have surged 3.14% at ₹155.80 apiece on the National Stock Exchange, while the BPCL stock declined 2.85% to ₹334.50. The share price of Indian Oil was trading up by 0.064% at ₹77.95, whereas shares of HPCL declined 2.05% to ₹231.95. The share price of Reliance Industries is also down 0.26% at ₹2,325.
Global oil cartel the Organisation of the Petroleum Exporting Countries (OPEC) has also announced surprise output cuts, sending crude oil prices on an upward trajectory. The output cuts will start in May 2023 and will last throughout the year. On Monday, the US West Texas Intermediate (WTI) surged by $6.34 to $80.47, while Brent crude rose 6.15% to $84.86.
The oil and gas industry, globally, witnessed a year-on-year increase of 3% in overall contract value in 2022, despite a 4% decrease in contract volume, reveals GlobalData, a leading data and analytics company.