India Cuts Windfall Tax On Local Crude Sales, Fuel Exports

India has cut a windfall tax on oil producers and refiners and exempted gasoline from an export levy, less than three weeks after it imposed the two charges.

Shares in oil companies that will benefit from the move rose. Reliance Industries jumped 4.3%, Oil India 8.8%, Oil and Natural Gas Corp 6.8% and Vedanta 4.3%.The government said in a statement an export tax of 6 rupees a liter no longer applied to gasoline. It had also reduced duty on diesel and aviation-fuel exports by 2 rupees a litre to 10 rupees and 4 rupees a litre, respectively, it said.

A windfall tax on domestically produced crude oil was cut to 17,000 rupees a tonne from 23,250 rupees.

Removal of the charge on gasoline will particularly benefit Reliance's 704,000-barrel-per-day export-focused refinery at Jamnagar in Gujarat state.

All changes took effect on July 20.

On July 1, India imposed the windfall tax on crude oil producers and levies on exports of gasoline, diesel and aviation fuel after private refiners turned to overseas sales to gain from robust refining margins instead of selling at lower-than-market rates in the country. [nL1N2YI07X]

Global crude oil prices and refining margins for gasoline, gasoil and jet fuel have eased since impostion of the taxes.