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In a major decision in a bid to improve exports, the Government of India has reduced export duties on items like petrol, diesel, and Aviation Turbine Fuel (ATF), among others. The decrease in duties is expected to bring Indian refined fuels closer to competitiveness in the international market and help the domestic refiners under margin pressure.

This is also taking place as oil consumption is recovering from a low point worldwide. Industry estimates suggest the duty cuts will spur and boost the possibility of exports, take out the shortfall in foreign currency earnings, and assist in the utilization of the excess refining capacity in the country.

The approval comes as good news for petroleum refiners, who say it would enhance their profitability and encourage increased production. The notification of the finance ministry is expected to have a positive impact on the major players such as Indian Oil, BPCL, and Reliance.

This will give India a stronger ground, analysts say, to emerge as a big exporter of petroleum products. The government will need to keep an eye on the effect of this reduction of duty on domestic fuel availability and exports in the coming months.