India

The world’s third-largest oil consumer has imposed export duties on shipments of diesel, gasoline and jet fuel overseas and also imposed windfall tax on crude oil producers. Moody’s Investors Service said the moves, which are designed to end product shortages in parts of India, will help generate close to $12 billion for the government for the current financial year that began Apr 1. India’s privately held refiners Reliance Industries and Rosneft’s majority-owned Nayara Energy have been buying discounted Russian crude and selling diesel to Europe, where profit margins are robust, while curtailing supplies in the domestic market. They are doing this because they cannot compete with state-owned Indian refiners that are selling oil products below market rates at deep losses at home to help the government keep inflation in check. Prime Minister Narendra Modi's government hopes that by imposing taxes on exported fuels and mandating that refiners sell half of their imported volumes in the domestic market, it will improve the situation. Demand for diesel and gasoline in India remained strong in June. Sales of diesel rose 11.5% from May to 1.87 million b/d in June, while gasoline sales rose 3.1% over the same period to 829,000 b/d