Cheap Russian Oil Boosts Govt Taxes
Russia has been selling crude oil to India at a discount of $5 to $30 per barrel for the last three years. According to a Moneylife study, 65% of the benefit of this discount went to government corporations like Indian Oil and Bharat Petroleum as well as private companies like Reliance and Nayara.
However, just 35% of the benefits of this trade went to the government. The average citizen of the nation is still untouched.
President Donald Trump of the United States has levied a 50% tariff on India. He pointed to India’s imports of Russian oil as the cause. Trump claims that it is processed and sold to Europe and other nations by Indian refinery businesses.
cheaper oil not benefit the average person?
Although the government and oil firms control the country’s retail petroleum prices, oil prices are deregulated on paper. While oil corporations use historical LPG subsidy losses to sustain margins, the government depends on fuel taxes for consistent revenue.
By purchasing cheap oil, refining it, and then selling it at higher prices, private refiners Reliance Industries and Nayara Energy—which process the most crude—earned significant refining margins of $12.5 and $15.2 per barrel, respectively.
Indian Oil, Bharat Petroleum, and Hindustan Petroleum made a combined profit of?3,400 crore in 2022–2023.
These three government enterprises had a 25-fold increase in profit in 2023–2024. Their combined income was Rs 86,000 crore.
Although these companies’ 2024–2025 profit dropped to Rs 33,602 crore, it still exceeded 2022–2023 profit.
About 30% of the oil was bought by Reliance from Russia: Reliance sources about 30% of its total oil purchases from Russia; the business claims that Russian crude discounts aren’t the only factor contributing to its earnings.
American-European processing and sales of Russian oil: Russian oil was refined into gasoline, diesel, and ATF before being shipped to the United States, Europe, the United Arab Emirates, and Singapore. 15 million tons, or $15 billion, of the 60 million tons of refined goods shipped in the first half of 2025 went to the EU.
Trump’s 50% tariff because of Russian tariffs, what did India say?
Noting that both the US and the EU continue to engage in substantial commerce with Russia, India referred to the additional levy as “unfair” and charged them with using double standards. Trade between the EU and Russia reached €67.5 billion in 2024, including record imports of machinery, fertilizer, metals, and LNG.
India claims that it started importing Russian oil after Europe switched to Gulf sources in order to meet its own needs rather than make money. Donald Trump offered China 90 days to negotiate a trade agreement free of further tariffs, despite China purchasing $62.6 billion worth of Russian oil in 2024 compared to India’s $52.7 billion.
