India raises export duty on diesel and jet fuel, scraps it on petrol

what happened

Shares of Indian Oil (IOCL), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) will be in focus for investors on Monday after the Indian government's latest fuel tax decision, according to Moody's. On Saturday, October 31, authorities raised the windfall tax on diesel and aviation turbine fuel (ATF) exports and cut the levy on petrol to zero for the fortnight starting October 31.

The ATF export duty rose from Rs 10.5 to Rs 11 per litre, while the special additional excise duty and road and infrastructure cess on diesel exports rose from Rs 8.5 to Rs 11.5 per litre. A higher diesel export duty may reduce refiners' export revenue, while scrapping the petrol duty offers some relief.

why it matters

The export duties were introduced in March because of the war in West Asia, aimed at boosting domestic fuel supply and stopping exporters from profiting from price gaps after global crude prices surged at the start of the conflict. For refiners, the key question is how the margin on diesel and jet fuel exports will shift.

market impact

Indian refiners' shares: higher diesel and ATF duties weigh on export revenue, petrol relief offers some support

• ↔Indian Oil, BPCL, HPCL shares mixed — higher diesel and ATF export duties cut export revenue, while the petrol duty cut supports

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