Page 40 - Policy Economic Report - December 2024
P. 40

POLICY AND ECONOMIC REPORT
                OIL & GAS MARKET

               Key Policy developments/Significant news in Energy sector

               Government scraps windfall tax on crude oil, jet fuel, petrol and diesel exports

               The government has officially withdrawn the windfall tax on crude oil, aviation turbine fuel (ATF),
               petrol, and diesel exports, marking a complete rollback of the levy introduced during a period of
               heightened global crude prices. Notifications numbered 29/2024 and 30/2024 formalised the
               decision, presented in Parliament by the Finance Ministry.

               First imposed in July 2022, the windfall tax formally known as Special Additional Excise Duty
               (SAED) was introduced to capitalise on extraordinary profits earned by oil producers and
               exporters amid surging global crude prices driven by the Russia-Ukraine conflict. Alongside this,
               the Road and Infrastructure Cess (RIC) on petrol and diesel exports has also been scrapped,
               effectively removing all export levies on fuel products.

               Adoption rate of ethanol blended fuel

               The Government has been promoting blending of ethanol in petrol under the Ethanol Blended
               Petrol (EBP) Programme wherein Public Sector Oil Marketing Companies (OMCs) sell ethanol
               blended with petrol. Under EBP Programme, the blending of ethanol with petrol increased from
               188.6 crore litres in Ethanol Supply Year (ESY) 2018-19 to more than 700 crore litres in ESY 2023-
               24 with corresponding increase in blending percentage from 5% in ESY 2018-19 to approximately
               14.6% in ESY 2023-24.

               Since 2019, the number of retail outlets selling ethanol blended petrol has increased steadily. In
               2019, ethanol blended petrol was sold from 43168 retail outlets of Public Sector OMCs which has
               increased to all retail outlets across the country in 2024.

               Under EBP Programme, the approximate foreign exchange savings from ESY 2018-19 to ESY 2023-
               24 is as follows:

                            ESY            Approximate foreign exchange saved (in rupees crore)
                          2018-19                                            5500
                          2019-20                                            3500
                          2020-21                                           10100
                          2021-22                                           22500
                          2022-23                                           24300
               2023-24 (as on 30.09.2024)                                   28400

December 2024                                                                                    Page | 39
   35   36   37   38   39   40   41   42   43   44   45