Yes, petrol and diesel taxes are steep. No, don’t cut them
India’s middle class, supported by many opposition parties, wants a cut in fuel taxes to stem the sharp rise in petrol and diesel prices. This would be wrong for several reasons. The same political and middle classes claim they want to check the threat of climate change. But cutting fuel taxes will encourage the consumption of petroleum products, increasing carbon emissions that warm the globe. Instead, the logical way forward is a high tax on all forms of carbon, making this revenue-neutral by cutting taxes on other items. That will discourage carbon emissions without affecting tax revenue, which is needed for infrastructure and essential social spending. This will be a wise climate precaution even if the global warming threat turns out to be exaggerated. Surprise surprise, India is doing exactly this. The Goods and Services Tax (GST) rate on most items ranges from zero to 18%, with a few items bearing 28%. But the effective tax rate on petrol is close to 100% in states like Maharashtra, Delhi and Karnataka. So, India is levying an exceptionally high tax on the carbon in oil products, and compensating with lower taxes on other items. Note — these other items include coal, which really should be covered by a carbon tax too. The high tax on oil products can be called a partial but substantial carbon tax, that reduces emissions significantly. Three other major reasons justify exceptionally high taxes on oil products. First, they are polluting, and have helped convert many cities into death-traps. Second, they are non-renewable, and a high tax helps conservation. Third, oil is by far the biggest import item and threatens to rise exponentially as India develops and urbanises. This makes India vulnerable to sudden rises in oil price. These can tip the balance of payments from okay to worrying, inducing a massive outflow of foreign portfolio investment (this is happening right now). Today, this is by far the most important reason to keep taxes high. Foreign portfolio investors are pulling billions of dollars from all emerging markets including India, threatening the sort of financial meltdown we saw in 2013. The Modi government has done well to declare that it will hold firm on oil taxation, and avoid populist giveaways that could threaten both fiscal and currency stability. Petroleum products have been kept out of the GST. Instead the central government levies a flat excise duty tax plus cess of Rs 19.48/litre on petrol and Rs 15.30/litre on diesel. States then levy a value added tax (VAT) which varies from state to state. For petrol, VAT is highest in Maharashtra (39%) with Karnataka levying 30.28% and Delhi 27%. In Delhi, the retail price has crossed Rs 80/litre, of which around Rs 36/litre consists of central and state taxes. The states get most of this — all of VAT plus 42% of the Centre’s excise duty (under the Finance Commission’s latest award). When world oil prices rise, the flat central excise duty does not change. But the state VAT rises with the import price. SBI chief economist Soumya Kanti Ghosh suggests the states will gain a windfall of Rs 220 billion from the recent sharp rise in oil prices, providing space for them to cut VAT. Poll-bound Andhra Pradesh and Rajasthan have already done so. In fact the supposed windfall gain is illusory at a national level. The notion that oil-importing countries gain hugely from a rise in oil prices is surely laughable. Yes, higher prices mean more tax revenue, but much more expenditure too. Higher prices increase the travel bills of central and state governments, and dearness allowance too in due course. They increase subsidies on controlled items like kerosene and cooking gas. They increase the cost of fertilisers, and hence of fertiliser subsidies. They increase the cost of farming, and hence lead to higher crop support prices and higher food subsidies. The railways and state transport corporations use a lot of diesel and will pay more. State-owned coal-based power stations use a lot of fuel oil, and will pay more. The list goes on and on. The combined fiscal deficits of the Centre and states have remained very high by world standards at 6.7 to 6.9% of GDP in Modi’s four years. The decline in the Centre’s fiscal deficit has largely been offset by rising state deficits. Prachi Mishra of Goldman Sachs has shown that governments tend to increase fiscal deficits in pre-election years, an additional source of vulnerability. At a time when foreign investors are pulling billions out of emerging markets, fears of fiscal slippage will only increase the outflow. This is no time to cut any taxes whatsoever. ArDarius Stewart Jersey
Fuel demand growth strong in August despite record high prices
Demand growth for petrol and diesel stayed strong in August despite record prices although overall oil demand growth decelerated to less than 1% in the country from nearly 8% in July. The weaker rupee and high crude oil prices have combined to take fuel prices to record highs in the country but that doesn’t seem to have hurt demand for transportation fuel much. In August, consumption of petrol rose 7.8%, and diesel 4.2% from a year earlier. Petrol and diesel sales had grown by 7.8% and 4.9% respectively in July when prices were lower. Robust sales growth in petrol and diesel is partly due to the base effect as sales had contracted in August 2017, HPCL chairman MK Surana told ET. The Goods and Services Tax was launched in July last year, and initial confusion that accompanied the roll-out had contributed to contraction in fuel demand in August. Record fuel prices don’t seem to have pushed consumers towards public transport or vehicle sharing. “People don’t shift their transport behaviour on the fly. Only if prices are higher for longer and are anticipated to stay high in future, it may trigger behaviour change,” Surana said. People can’t quickly dump their private cars and bikes since a bunch of convenience public transport just can’t match. Similarly, factories, telecom tower companies, shopping malls or residential societies that use diesel generators wouldn’t stop using them due to higher fuel prices but may plan an alternative if prices stay high for longer, Surana said. A structural shift away from diesel to petrol cars in passenger vehicle segment also partly explains the different growth curve for petrol and diesel demand, he said. Total oil demand that includes naphtha, cooking oil, jet fuel, petcoke besides transportation fuel, expanded just 0.76 per cent from a year earlier in August. In July, it had grown 7.7per cent. Major contribution in oil demand slowdown has come from petcoke whose consumption has contracted a fifth in August. George Bell Womens Jersey
Brookfield to acquire Ambani gas pipeline
Canadian investor Brookfield is set to buy the lossmaking East West Pipeline Ltd (EWPL), earlier known as Reliance Gas Transportation Infrastructure Ltd, for an enterprise valuation of Rs 14,000 crore ($2 billion). Brookfield is uniquely sponsoring an infrastructure investment trust (InvIT) called India Infrastructure Trust as the acquisition vehicle to take over the 1,400 km common carrier pipeline from Kakinada on the east coast to Bharuch in Gujarat. The Competition Commission of India (CCI) approved the transaction last week. Brookfield has also filed an application with the Securities and Exchange Board of India (Sebi) for registering the InvIT, approval for which is expected this month, following which a formal joint announcement will be made, said multiple sources aware of the matter. The pipeline housed under EWPL is being transferred to an entity called Pipeline Infrastructure Pvt Ltd (PIPL), a wholly owned subsidiary of Reliance Industries Holding Pvt. Ltd (RIHPL). That’s a holding arm of Mukesh Ambani and family, the promoters of Reliance Industries Ltd (RIL). EWPL has already filed an application with the National Company Law Tribunal for the asset transfer. The $2 billion will be evenly split between equity and debt and Brookfield is said to be currently in negotiations with Indian lenders such as ICICI Bank for financing. Brookfield declined to comment. There was no response from Reliance to queries sent on Saturday. JM Financial is advisor to the transaction. As part of the contract with Brookfield, Ambani is also said to be negotiating a clause that would allow buying back the asset after 20-25 years. But those terms are still getting finalised. “It’s a great way of monetising an asset. Brookfield and the four other small sponsors of the trust will get cashflows from the pipeline, which will give them their desired yields,” said a Reliance executive on condition of anonymity. “InvITs are tax-efficient vehicles and give an optionality in the future to add more assets.” DIRECT LINKS TO RIL BUSINESS The pipeline, Sikka Ports & Terminals Ltd (SPTL) and Reliance Utilities and Power Pvt Ltd (RUPPL) are key companies in Ambani’s privately held RIHPL Group and their operations are critical for RIL as they are closely integrated with those of its facilities in Jamnagar, Dahej and Hazira in Gujarat, and with its Krishna-Godavari (KG) D6 gas fields. The facilities cater exclusively to RIL’s existing facilities as well as its expansion in the petrochemicals and refining business, which is nearing completion. EWPL has built and operates the critical pipeline to transport natural gas produced by Reliance-BP from the KG basin on the east coast and links to users on the west coast. It also transports gas from other sources including RLNG (regasified liquefied natural gas) terminals along the stretch of the pipeline and is connected to pipelines of other operators such as state-run GAIL (India) Ltd and Gujarat State Petronet Ltd for onward delivery nationwide. However, the sharp drop in production in KG-D6 has had an impact on the company’s financials. EWPL had operational revenue of Rs 884 crore and posted a net loss of Rs 715 crore in the year ended March. The company was bleeding due to high interest expenses, which were almost equal to its revenue, and depreciation costs. It had a total outstanding debt of Rs 13,715 crore as of March while its plant, property and equipment had an asset value of around Rs 11,000 crore, according to its last annual balance sheet. EWPL had separately disclosed in a regulatory filing that it was hiving off its investment division to immediate holding company Sikka Ports. “EWPL’s cash flow is sensitive to the volume of gas available for transportation. Low volume reduces capacity utilisation and revenues, thus impacting cash accruals. There has been a significant drop in RIL’s gas production from its KG-D6 block over the last few years, which has constrained its cash flows,” said rating agency Crisil in a note earlier this year. The average production was about 5 mmscmd (million metric standard cubic meter per day) in the third quarter of FY18, down from about 8 mmscmd in fiscal 2017 and about 12 mmscmd from fiscal 2014 to fiscal 2016, which in turn was significantly lower than 26 mmscmd in fiscal 2013. “Nevertheless, gas volumes are expected to increase after RIL and BP’s joint deepwater gas-field project at the KG-D6 basin commences production (expected in 2020),” the note added. In five years since April 2012, RIHPL group has extended support to EWPL in the form of subordinated debt and preference shares of about Rs 4,826 crore and Rs 8,000 crore, respectively, as of March 31. INDIA BETS Surpassing heavyweights Carlyle, KKR or even Apollo, Brookfield, is the world’s second-biggest manager of alternative assets like real estate and private equity with $285 billion of assets, after Blackstone, which is number one. In India, it has already deployed over $5 billion since 2009-10, but once concluded, this will be its largest deal. Brookfield’s India bets includes the largest commercial real estate transaction in India in 2014 — acquiring a 15 million square foot portfolio of office properties from Unitech. In the last two years, it has purchased a portfolio of six toll roads, totalling 246 km of roadways, and a majority stake in a cell phone tower network. Globally, it has been an aggressive investor in energy assets and related infrastructure — buying gas pipelines in Brazil, coal terminals in Australia and even gas stations in Canada. Currently through its active management, the firm manages over 2,200 km of backbone electricity transmission, 6.5 million direct customer electricity and natural gas connections, 980,000 smart meters, 2,000 km of regulated natural gas pipelines and 85 million tonnes per annum of coal handling capacity. Within its energy portfolio, its assets include one of the largest natural gas transmission and pipeline systems in the US, unregulated natural gas and liquid propane gas distribution operations in Australia; natural gas storage centers in Alberta and district heating and cooling systems in Australia, Canada and the US. Tyler Ervin Authentic
PM Narendra Modi, Sheikh Hasina to unveil oil pipeline next week
Prime Minister Narendra Modi and his Bangladesh counterpart Sheikh Hasina will next week jointly inaugurate two key connectivity projects that are expected to strengthen Hasina’s position ahead of parliamentary polls there. ET has learnt that the two prime ministers will launch, via video conference, a cross-border oil pipeline and an India-financed railway line that will seek to ease travel to Bangladesh capital Dhaka. The oil pipeline will supply 1million metric tonnes of high speed diesel per annum to Bangladesh. The diesel is currently transported through a cross-border train from Numaligarh refinery in Assam. The railway line will connect Joydevpur and Tongi with Dhaka. India has so far offered almost $800 billion line of credit to Bangladesh, the highest for any country, in the backdrop of growing bonhomie between Delhi and Dhaka. Alexander Mogilny Womens Jersey
Asia to dominate long-term LNG demand growth
The ‘Global LNG Outlook 2018’, the latest forecast from Bloomberg NEF (BNEF), shows that LNG demand will be 308 million tpy this year, up from 284 million tpy in 2017. Half of the 24 million tpy of growth will come from China and the remainder largely from Japan, South Korea and India. The report highlights that Asia will be the core growth region in the coming decade. “The region will add a total of 143 million tpy in 2017 – 2030, accounting for 86% of the world’s total LNG demand growth in the period.” commented Maggie Kuang, head of Asia Pacific LNG analysis and lead author of the report. BNEF expects strong demand from China and emerging markets in South Asia to boost global LNG trade in 2019, with 12 million tpy likely to be added. This demand growth will slow down during 2020 – 2021, when Japan restarts its ninth nuclear plant and Russian pipeline gas starts to supply China. However, any global supply surplus after 2019 is likely to be modest and brief. Ashish Sethia, global head of LNG analysis stated: “Average utilisation of export plants in 2020 – 2021, when post-FID supply capacity peaks, will likely be 87%, which would be the lowest in the past decade, but that only suggests a modest surplus. Post-2021, growth will rebound with South and Southeast Asia becoming the main growth engine due to faster depletion of local gas and significant infrastructure build-out.” BNEF has cut its long-term forecast on European LNG demand (including Turkey) to 60 million tpy by 2030. John Twomey, head of European gas analysis said: “Growth of renewables and batteries will marginalise gas-fired generation in the European power system. This will restrict the growth of LNG imports, despite declines in Dutch and Norwegian gas production. Europe will limit its reliance on Russian pipeline gas imports.” On the supply side, 103 million tpy of new capacity will be added globally during 2017 – 2021. Global post-FID capacity is expected to peak at 392 million tpy in 2021, providing sufficient supply to meet demand to 2025. About 17 projects will likely take FID in coming years, potentially adding 172 million tpy of capacity by 2030. The growth of demand in Asia and a further drive to cut the cost of US LNG will likely lead to some new sales and purchase agreements for US LNG. “About 90 million tpy of ‘likely’ FIDs in the next few years are from North America, mostly in the Gulf of Mexico” said Anastacia Dialynas, lead LNG analyst, Americas. Volumes of new LNG term contracts signed each year since 2015 have been stagnating. In the first eight months of 2018, some 7.1 million tpy of supply contracts were signed, the same as a year earlier. The share of short-term (1 – 4 years) contracts went up to 41%, up from less than a quarter over the last decade. This indicates buyers’ increasing preference for shorter tenure. BNEF expects contract signing activities to revive from 2021 when existing contracted supply becomes thin. New contracts to underpin FIDs on new supply projects will also need to take place by 2021 to provide sufficient supply capacity post-2025. Tyler Myers Womens Jersey
Russia is our largest investment destination in oil, gas sector: Pradhan
Hailing Russia as India’s largest investment destination in the oil and gas sector, Union Minister Dharmendra Pradhan on Thursday said that Moscow will always be a priority in New Delhi’s foreign and energy policy. Speaking at a conference titled ‘India-Russia in the 21st Century: Enhancing the Special Privileged Strategic Partnership’ here, Pradhan said: “I believe that our time-tested relationship has no expiry date. Russia will always be a priority in India’s foreign and energy policy and both our countries will remain as a role model for global communities.” He told ANI on the sidelines of the conference that Prime Minister Narendra Modi and Russian President Vladimir Putin share a “deep friendship” and that the two countries have built an ‘energy bridge’ between themselves. “Prime Minister Modi and Russian President Vladimir Putin share a deep friendship and respect for each other which is beyond the business and diplomatic relations. Today Russia is the closest friend,” he noted. Pradhan also opined that the signing of the declaration on the India-Russia Strategic partnership between former Prime Minister Atal Bihari Vajpayee and President Putin was a “watershed moment in our relations”. “Vajpayee ji’s efforts infused warmth and transformed our co-operation into Special and Privileged Strategic Partnership. Last year, we celebrated 70 years of diplomatic ties between India and Russia. The seventy plus years of our bilateral relations has been further strengthened by Prime Minister Modi and President Putin in the last couple of years by adopting the historic St. Petersburg declaration,” he said. Our energy relations were never as strong as they have become in the last couple of years. Our engagement in the hydrocarbon sector, including some major investments, has become one of the key pillars of our bilateral relations. India and Russia have deeply strengthened their hydrocarbon engagement and we have also built an ‘Energy Bridge’ between our two countries. Soviet technology helped us in oil and gas since 1960s. Striking oil at Bombay High, India’s biggest oil and gas field, was also due to soviet experts,” the minister added. Pradhan stated that Prime Minister Modi and President Putin have placed “special emphasis on the energy sector as a priority area in our bilateral cooperation”. “Russia is one of the largest producers of oil and natural gas in the world and it can become an important source to fulfill India’s requirements. India has embarked on the path of becoming a gas-based economy. Russian supplies will help us in meeting the objectives of price stability and energy security. Our oil and gas PSUs are continuing to explore their participation in more oil and gas projects in Russia,” he underscored. Brian Urlacher Jersey
Petronet LNG CEO Prabhat Singh gets 12.5 per cent higher commission in FY18
Petronet LNG, India’s biggest liquefied natural gas importer, has paid a 12.5 per cent higher commission-on-profit to its chief executive Prabhat Singh and company directors in the fiscal year ended March 31, 2018. According to the company’s Annual Report for 2017-18, Singh was paid a commission of Rs 2.250 million over and above his remuneration. This compared with Rs 2 million commission he got in the 2016-17 fiscal year. Petronet Director (Technical) Rajender Singh earned a similar commission in both the years. The commission to Prabhat Singh took his total remuneration to Rs 11.6 million in 2017-18 as compared to Rs 10.8 million in the previous fiscal. Petronet, which is registered as a private limited company but is headed by the Oil Secretary, also paid its three independent directors — A K Misra, Sushil Kumar Gupta and Jyoti Kiran Sukla, a commission ranging from Rs0. 314 million to Rs 0.85 million over and above their sitting fee. Prabhat Singh took over as the Managing Director and CEO of Petronet LNG on September 14, 2015. That year he was paid a commission of Rs 0.821 million. The commission to other full-time directors including Rajender Singh and the then Director (Finance) R K Garg was Rs 1.5 million. According to the 2017-18 annual report, the ratio of the remuneration paid to the chief executive to the median remuneration of the employees of the company was 9.4:1. Petronet earned a net profit of Rs 20.78 billion on a turnover of Rs 305.99 billion in 2017-18 fiscal. This compared with Rs 17.06 billion net profit on a turnover of Rs 246.16 billion in the previous year. In the annual report, Petronet said it has signed a memorandum of understanding (MoU) with Andaman and Nicobar Administration for the establishment of a small-scale floating LNG receiving, storage and regasification terminal and gas-based power plant at South Andaman. Pre-project studies like environment impact assessment, geotechnical investigations and marine studies including navigational studies have been completed which would be used to prepare a detailed feasibility report. Petronet has also signed an MoU with Petrobangla of Bangladesh for setting up a land-based 7.5 million tonnes a year LNG receiving, storage and regasification terminal at Kutubdia Island. It has also inked a pact with Sri Lankan authorities for developing LNG infrastructure in the island nation. Petronet, which is 50 per cent owned by state-owned oil firms, operates two terminals for import of natural gas in its liquid form (LNG) in India – 15 million tonnes facility at Dahej in Gujarat and a 5 million tonnes a year unit at Kochi in Kerala. Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL), GAIL India Ltd and Oil and Natural Gas Corp (ONGC) each hold 12.5 per cent stake in Petronet. Its chairman, however, is the Secretary, Ministry of Petroleum and Natural Gas. Petronet said it is working on the use of LNG as a transportation fuel in place of diesel and CNG. The “company has prepared a business plan based on traffic study on Indian roads and decided to develop an LNG corridor covering 4000 kms of National highways,” the annual report said, adding it has shortlisted 20 locations to develop LNG dispensing stations as a pilot project.
India’s fuel demand rose 0.8 per cent year-on-year in August
India’s fuel demand rose 0.8 per cent in August compared with the same month last year. Consumption of fuel, a proxy for oil demand, totalled 16.60 million tonnes, data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed. Sales of gasoline, or petrol, were 7.8 per cent higher from a year earlier at 2.36 million tonnes. Cooking gas or liquefied petroleum gas (LPG) sales increased 2.8 per cent to 2.11 million tonnes, while naphtha sales surged 1.1 per cent to 1.09 million tonnes. Sales of bitumen, used for making roads, were 18.9 per cent up, while fuel oil use edged up 8.3 per cent in August. Erik Swoope Authentic Jersey
Gujarat: Armed with licences, gas companies unleash talent hunt
Talent hunt is intensifying among city gas distribution (CGD) companies following the government issuing retailing licences for 78 Indian cities in one go in August. With as many as four Gujarat-based companies having bagged licences, hiring activity has intensified, leaving a dent in public sector firms. In the last six months, about half a dozen top honchos have switched sides. Recently, PPG Sarma, former CEO of Gujarat Gas Ltd, joined Torrent Gas Pvt Ltd., a part of Torrent group which forayed into city gas distribution by bagging licences for nine cities. Around the same time, Shridhar Tambraparni, who retired from Adani Gas Ltd., too joined Torrent as vice-president. Gujarat Gas Limited, one of the oldest and largest players in CGD business, has been at the receiving end. In the last two months, the company has lost five senior professionals to Torrent Gas. “The development of CGD networks could result in 80,000-90,000 incremental jobs over the next five years, including contingent jobs,” said Amit Vadera, head-BFSI and PSU, TeamLease Services Ltd, a human resource service company. “There will be more recruitments in CGD space, which is currently dominated by public sector entities. Entry of private players will further increase jobs and entire sector will grow. Existing players such as GGL, Mahanagar Gas Ltd, GAIL Gas and IOC will see some attrition as well,” said a senior official of a CGD company. “Existing players have large pool of manpower and exodus of few employees won’t make much of a difference to them,” said the source, adding that similar trend was witnessed when GSPC Gas and Gujarat State Petronet Limited (GSPL) were launched. Out of the total 86 geographical areas across the country offered under the ninth round of bidding for CGD, Petroleum and Natural Gas Regulatory Board (PNGRB) has granted licences to retail natural gas in 78 cities. The bidding also saw new entrants such as Torrent Gas, Megha Engineering and Infrastructure Ltd, Essel Gas and consortiums led by Think Gas Investments PTE Ltd and AG&P LNG Marketing Pte Ltd. According to industry estimates, for a new company in CGD business, 100 to 150 professionals are required to build the core team for planning, execution, administration and regulatory clearances. Apart from this, 30 onsite employees are required to serve 1 lakh connections. These jobs pertain to billing, accounting, collection and technical as well as safety support. “Assuming that each of the new 86 cities has minimum 2 lakh connections, 60 people will be required for onsite operations for one city. For all the cities, more than 5,200 people will be required for onsite alone,” said a veteran CGD business professional. Gujarat-based companies grabbed majority of cities with Adani Gas receiving distribution rights for 13 areas on its own and 9 in joint venture with Indian Oil Corporation. Tom Kuhnhackl Jersey
Bharat Petroleum Plans Rs 1-Lakh-Crore Expansion Over Five Years
Bharat Petroleum Corporation Ltd. is planning to invest Rs 1000 billion over the next five years for refinery upgradation, marketing infrastructure, petrochemicals production and city-gas distribution. This will help the company expand its refining capacity to 50 million metric tonnes in five years and gas production to 5 million metric tonnes in four years, Chairman and Managing Director D Rajkumar told BloombergQuint in an interview. As of March 2018, total crude oil processed by the company’s group refineries was 31.35 million metric tonnes, at a capacity utilisation of over 117 percent. Its gas production stood at 1.87 million metric tonnes. The state-run oil marketer plans to spend Rs 74 billion in the ongoing financial year. “This is for the ongoing projects, especially for the Kochi and Mumbai refineries as well as some marketing projects,” Rajkumar said. BPCL completed its integrated refinery expansion project at Kochi, which increased its capacity from 9.5 million metric tonnes per annum to 15.5 million metric tonnes per annum. The company also plans to upgrade its Mumbai refinery from 12 million metric tonnes per annum to 14 million metric tonnes per annum. Besides, it’s looking to expand the capacity of its Assam-based Numaligarh refinery from 3 million metric tonnes per annum to 9 million metric tonnes per annum, Rajkumar said. The company, he said, is planning to expand the capacity of Bina refinery to 15.5 million metric tonnes per annum in four years. “That’s in the initial stages.” Bina refinery—a 50:50 joint venture between Oman Oil Company Ltd. and BPCL—is also looking for potential investors as Oman Oil plans to offload part of its stake. “The KPC (Kuwait Petroleum Corporation) could be a potential partner but that depends on how it’s going to pan out in the days to come,” Rajkumar said. Rising Oil Prices As oil prices peaked in the country, the oil-marketer said the government had not asked them to absorb the hike yet. “There is no communication from the government, whatsoever, at this point in time to absorb the prices,” Rajkumar said. “Currently, we are passing on the prices.” There are no plans to absorb either, he said. The tax component, he said, was on the higher side for oil. Citing the instance of Mumbai, Rajkumar said the taxes were as high as 40 percent for the high-speed diesel variant and 50 percent for the motor spirit-variant. In India, taxation on oil is ad-valorem, which means that as oil prices surge, the taxes levied also rise. Anthony Walker Authentic Jersey