Shares of Indian Oil Corporation (IOCL), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) are likely to remain in focus on November 2 following the central government’s decision to revise export duties on petrol, diesel and aviation turbine fuel (ATF).
Under the revised tax structure, the government has reduced the export duty on petrol to zero for 15 years, effective October 31. However, the windfall tax on diesel and ATF exports has been increased.
These changes could influence the refining operations and export earnings of the three major oil marketing companies. While the removal of petrol export duty may offer some relief, higher taxes on diesel exports could put pressure on refining margins and profitability.
IOCL, BPCL and HPCL Share Price Performance
Investors will closely monitor the shares of these oil companies following the government’s latest announcement.
On Friday, October 30, Indian Oil Corporation shares declined 0.12% on the BSE to close at ₹130. The company’s market capitalisation stood at ₹1,83,576.10 crore.
Bharat Petroleum Corporation shares also ended lower, falling 1.47% to ₹284.30. Its market capitalisation was recorded at ₹1,23,342.68 crore.
Meanwhile, Hindustan Petroleum Corporation shares dropped 0.72% to close at ₹339.50. The company’s market capitalisation stood at ₹72,239.57 crore.
Government Increases Export Tax on Diesel and ATF
The central government has raised the export duty on aviation turbine fuel (ATF) from ₹10.50 per litre to ₹11 per litre.
The tax applicable to diesel exports has also been increased through a revision in the Special Additional Excise Duty (SAED).
Including the road and infrastructure cess, the total tax on diesel exports has increased from ₹8.50 per litre to ₹11.50 per litre.
The higher duties could affect the economics of exporting these petroleum products and may influence the earnings of companies involved in refining and fuel exports.
Petrol Export Duty Reduced to Zero
Along with increasing taxes on diesel and ATF exports, the government has removed the export duty on petrol.
Previously, petrol exports attracted a duty of ₹2.50 per litre. Under the latest revision, this charge has been reduced to zero, effective October 31, for a period of 15 years, according to the information provided.
The decision comes several months after export duties were introduced on diesel and ATF in March.
The contrasting changes in export taxation could have different implications for oil companies, depending on their product mix, refining operations and export exposure.
Why Did the Government Introduce Windfall Tax?
The government introduced windfall taxes on petroleum fuel exports to ensure adequate fuel availability in the domestic market during the West Asia conflict.
Another objective was to prevent exporting companies from gaining an unfair advantage from differences between international and domestic fuel prices.
Following the escalation of the conflict in West Asia, global crude oil prices witnessed a sharp increase from the beginning of the year. Against this backdrop, the government decided to impose taxes on fuel exports to manage domestic supplies and address the impact of rising international prices.
Disclaimer: This article is intended for general news and informational purposes only. The share prices, market capitalisation figures and taxation details are based on the information provided in the source material and may change. This article does not constitute investment advice or a recommendation to buy or sell any stock. Investors should independently verify the latest government notifications and market data or consult a qualified financial adviser before making investment decisions.