Key facts
- India has raised export duties on diesel and jet fuel for the period July 16-31.
- The diesel export tax is now 15.50 rupees ($0.16) per liter, up from 8.5 rupees.
- The jet fuel export tax increased to 14.5 rupees per liter from 7.5 rupees.
- The export duty on gasoline was reduced to 2.5 rupees per liter from 4 rupees.
- India reviews its export duty policy every two weeks based on market conditions.
India has increased export duties on diesel and jet fuel for the two weeks starting July 16, a move that could curb exports from the world's third-largest oil consumer. The levies on diesel were raised to 15.50 rupees ($0.16) per liter from 8.5 rupees, while jet fuel export taxes climbed to 14.5 rupees a liter from 7.5 rupees. Meanwhile, the export duty on gasoline sales overseas was lowered to 2.5 rupees a liter from 4 rupees.
These adjustments are part of India's regular fortnightly review of its export duty policy, which considers domestic and international market conditions, including supply and prices. The decision comes as global fuel markets are already exceptionally tight, particularly for diesel, due to factors including Russia's export ban and disruptions to Russian refining capacity. Analysts suggest the higher duties could reduce India's fuel exports, potentially exacerbating the global shortage.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted that the primary stress in energy markets is currently in refined products rather than crude oil. He highlighted that diesel, gasoil, and jet fuel are commanding strong premiums due to low inventories, refinery issues, and peak seasonal demand, tightening product availability.