* India levies windfall tax of 23,250 rupees/T on oil
* Imposes export tax of 6 rupees/litre on gasoline and jet
* Imposes 13 rupees/litre exports tax on gasoil
* Fuel exporters must sell some volumes in local market
(Adds detail, graphics)
NEW DELHI, July 1 (Reuters) - India has imposed windfall tax
on oil producers and refiners who have boosted product exports
to gain from higher overseas margins as the government seeks to
increase local supply of fuels to meet rising demand and
increase federal revenues.
New taxes along with export restrictions will curb fuel
exports by refiners Reliance Industries and Nayara
Energy, part-owned by Russia's Rosneft, and could
further tighten global oil product supplies and support prices.
Their shares, along with those of oil producers Oil and
Natural Gas Corp, Oil India Ltd and Vedanta
Ltd tumbled as the taxes will dent their earnings.
Private refiners Reliance and Nayara have been among India's
biggest buyers this year of discounted Russian supplies and have
been reaping major profits by reducing domestic sales and
aggressively boosting fuel exports, including to buyers in
Europe, where many buyers are avoiding imports of Russian crude.
In contrast, state refiners have cranked up runs to meet
rising local demand and sell fuels at the government-capped
lower prices. Some state refiners have also issued tenders to
Reliance shares fell as much as 8.9% to 2,365 rupees
apiece, their biggest intra-day percentage drop since November
2020, while Mangalore Refinery and Petrochemicals slumped 10% to
Those of state rivals Indian Oil Corp, Hindustan
Petroleum and Bharat Petroleum rose after
the announcement of the export restrictions and taxes of 6
rupees per litre for both gasoline and jet fuel and 13 rupees
per litre for gasoil.
"While crude prices have increased sharply in recent months,
the prices of diesel and petrol have shown a sharper increase.
The refiners export these products at globally prevailing
prices, which are very high," the government said in a
"As exports are becoming highly remunerative, it has been
seen that certain refiners are drying out their pumps in the
New restrictions require oil companies exporting gasoline
to sell to the domestic market the equivalent of 50% of the
amount sold overseas for the fiscal year ending on March 31,
For diesel, they are required to sell domestic buyers the
equivalent of at least 30% of the amount that they export.
Vedanta shares dropped as much as 7.6% to hit their lowest
since March 2021 and those of ONGC fell 14.2%, their worst
intra-day percentage fall since March 2020.
New export restrictions will not apply to export-focussed
units like Reliance's 704,000 bpd refinery at Jamnagar in
western Gujarat and on supplies to Bhutan and Nepal, the
government orders said.
Refining profit margins, or cracks, for the 10 ppm gasoil
grade jumped to $54.93 per barrel over Dubai crude
on Friday, Refinitiv Eikon data showed. Margins for jet fuel
rose $6.72 to $47.22 per barrel over Dubai crude,
while gasoline cracks <GL92-SIN-CRK> in the region rose to
$28.75 a barrel.
"Crude prices have risen sharply in recent months. As a
result, the domestic crude producers are making windfall gains,"
the government statement said, justifying imposition of a levy
of 23,250 Indian rupees ($294.04) per tonne on local crude
The new windfall tax will not apply on incremental barrels
produced by the companies this fiscal year and to small
explorers that produce less than 2 million barrels in the last
fiscal year to March 31, 2022.
($1 = 79.0700 Indian rupees)
(Additional Reporting by Aftab Ahmad, Sethuraman N. R and Mohi
Narayan; editing by Robert Birsel and Emelia Sithole-Matarise)