Indian bunker market suffers post govt's windfall tax on fuel exports
7th July 2022 15:43 GMT

Windfall tax imposed on oil producers and refined product exporters by the Indian government has started affecting gasoil sales at bunker traders, sources said July 7.

The Indian government's decision was in a wake of rising petroleum products exports by Indian refiners that reaped huge dividends from cheaper Russian crudes oil purchases. Russian purchases led Indian refiners to direct most of their produce for exports, hurting the country's domestic market.

From July 1, fixing gasoil inquires requires an additional $225-$277/mt to the base price due to the government-imposed taxes, said a Mumbai based trader, with the taxes depending on the quality supplied at different Indian ports. “We have started losing business, my two bunker gasoil fixed inquires is cancelled for delivery in mid-July," the trader said. Few refineries were opposing the taxes and had stopped offering to bunker inquiries, according to the trader.

Delivered gasoil at Cochin was trading at $1,860/MT July 7 at a $860/mt premium to Singapore port, S&P Global Commodity Insights data showed.

Post the Indian government’s double whammy for Indian refiners and crude exporters, the refiners have to reserve and sell 50% gasoline and 30% diesel exports in the domestic market, barring Nepal and Bhutan along with gasoline solely produced for export and fuel produced at special economic zones.

The Indian government's decision is in line with the steps taken by other governments around the globe. Governments of the UK and China and other major nations have reserved enough fuel capacity to cater to their domestic market.

Bunkerworld .,
7th July 2022 15:43 GMT