The taxes imposed on domestic crude oil and fuel exports will generate close to $12 billion (Rs 94,800 crore) for the government in the remainder of the current fiscal, Moody's Investors Service said Tuesday, while trimming profit forecasts for Reliance Industries Ltd NSE -1.11 % and ONGC NSE -4.43 %.
The country's large foreign exchange reserves remain sufficient to pre-empt any issues concerning repayment of external debt despite weakening of the rupee, it said.
The additional revenue will help offset the negative impact of the reduction in excise duties for petrol and diesel announced in late May to tame soaring inflation. "Significant additional tax revenue will offset fiscal pressure on the sovereign," it said.
On July 1, the government imposed a "windfall" tax on the export of petrol, diesel, and aviation turbine fuel (ATF), and a cess on domestically produced crude oil.
"The tax increase will reduce the profits of Indian crude producers and oil exporters like Reliance Industries NSE-1.11 % Limited (RIL NSE-1.11 %) and ONGC," Moody's said in a note on the new taxes.
Following the announcement, Indian oil companies will have to pay 6 per litre (around $12.2 per barrel) on exports of petrol and ATF, and 13 per litre (around $26.3 per barrel) on exports of diesel.