Airlines seek clarity on export tax on petroleum products

Airlines seek clarity on export tax on petroleum products

India’s airlines have sought a clarification from the government on the recent addition of export taxes on petroleum products, which has considerably increased the prices of jet fuel purchased for international flights.

The higher levy aggravates cost pressures on airlines already reeling under soaring prices of aviation turbine fuel (ATF) that have set record highs several times this year. The charge also adds to what were already the highest levels of ATF taxes anywhere in the world.Unless relaxed, the new levy will likely force airlines to increase airfares on overseas flights, which could crimp demand.

The chiefs of Indian airlines on Tuesday met aviation ministry officials to seek clarification on the issue.The Federation of Indian Airlines didn’t immediately comment.The government, last week, imposed additional levies on export of petroleum products – petrol, diesel and ATF – to curb their exports and increase domestic supply.Private fuel companies including Reliance Industries and Rosneft-owned Nayara Energy had begun to export fuel in large quantities, taking advantage of a global fuel shortage created by the Russia-Ukraine war. This had in turn created a crunch in domestic supply with fuel pumps running dry across Indian cities.Now, under the new duty structure, Indian carriers refuelling for international flights are expected to pay an additional excise duty of 11%, said senior executives at airlines and oil marketing companies.



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