As a result of increased supplies, returns from processing gasoline and diesel in Asia have fallen precipitously in recent weeks, and industry consultant FGE anticipates a further reduction in margins this quarter.

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As a result of increased supplies, returns from processing gasoline and diesel in Asia have fallen precipitously in recent weeks, and industry consultant FGE anticipates a further reduction in margins this quarter.

Digital Desk: Less than three weeks after they were implemented, India removed a tax on gasoline exports and reduced windfall levies on other fuels, providing relief for the country's biggest crude explorer Oil & Natural Gas Corp. and No. 1 fuel exporter Ltd.

According to a government statement, New Delhi has totally eliminated the Rs 6-per-liter fee on gasoline exports and lowered the windfall tax on diesel and aviation fuel shipments by Rs 2 per litre. Additionally, it reduced the tax on crude that is produced domestically by around 27%, to Rs 17,000 per tonne. The news that the government was thinking about cutting taxes was first published by Bloomberg on Thursday.

On July 1, India implemented the levies, joining an increasing number of other countries that have done the same to capture the expanding earnings of the energy sector. However, since then, global gasoline prices have fallen, reducing profit margins for both oil producers and refiners.

Concerns over a future global recession have caused a decline in international crude prices since mid-June, at one time wiping out all the gains made after Russia's invasion of Ukraine. As a result of increased supplies, returns from processing gasoline and diesel in Asia have fallen precipitously in recent weeks, and industry consultant FGE anticipates a further reduction in margins this quarter.

Reliance and Rosneft-backed Nayara Energy Ltd., India’s only privately owned refiners, make up 80% to 85% of India’s overall gasoline and diesel exports, according to FGE.