India's diesel exports fell by 11 per cent in July and overseas shipment of petrol dropped by 4.5 per cent after the government slapped a windfall profit tax on such sales, official data showed.

Diesel exports dropped to 2.18 million tonnes in July from 2.45 million tonnes a month back, data from the Oil Ministry's Petroleum Planning and Analysis Cell (PPAC) showed.

Similarly, petrol exports fell to 1.1 million tonnes from 1.16 million tonnes in June.

India first imposed windfall profit taxes on July 1, joining a growing number of nations that taxes super normal profits of energy companies. Export duties of Rs 6 per litre were levied on petrol and aviation turbine fuel and Rs 13 a litre on diesel.

The duties were partially adjusted in three rounds on July 20, August 2 and August 19, and have now been removed for petrol, with Rs 7 per litre and Rs 2 per litre remaining for diesel and ATF, respectively.

The export levies helped ease the strain on domestic fuel supply. The levies were aimed at deterring firms like Reliance Industries Ltd and Russia's Rosneft-backed Nayara Energy from choosing overseas markets for their fuel they make instead of supplying locally.

With state-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL), which control 90 per cent of the market, deciding to sell petrol and diesel at substantial losses to help government curb inflation, private fuel retailers choose international market to sell fuel instead of selling locally at loss.

This together with bulk buyers like state transport buses queuing up state-owned oil companies' petrol pumps instead of paying a higher market price for direct purchase, led to retail outlets in several states running out of fuel.

The export duties and regulation mandating preference to local supplies over exports brought normalcy at petrol pumps. International oil prices shot up following Russia's invasion of Ukraine in February, sending cracks or margins on fuels like petrol and diesel to record highs.

In July, India exported 4.68 million tonnes of petroleum products, 82 per cent of which was petrol, diesel and ATF. ATF exports were marginally down to 583,000 tonnes in July from 591,000 tonnes in the previous month, the PPAC data showed.

Diesel exports in March touched the second highest level of 3.36 million tonnes, before tapering to 2.7 million tonnes in the following month. They rose to 3.05 million tonnes in May and fell to 2.45 million tonnes in June.

The highest ever amount of diesel was exported in April 2020 when 3.4 million tonnes of the fuel was shipped. Petrol exports peaked at 1.6 million tonnes in March.