The Union government has reduced the windfall tax on domestically produced crude oil from Rs 7,000 to Rs 4,600 per tonne. This adjustment reflects recent changes in global oil prices and market conditions.
Key Details:
- New Tax Rate: The windfall tax on crude oil has been cut to Rs 4,600 per tonne. This is a significant decrease from the previous rate of Rs 7,000 per tonne.
- Tax on Diesel and ATF: The government has decided to keep the windfall tax on diesel and aviation turbine fuel (ATF) at zero. This rate remains unchanged.
- Previous Adjustments: On July 16, the windfall tax on crude oil was increased by 16.7% to Rs 7,000 per tonne. At that time, the taxes on diesel and ATF were left at nil.
- Background: Introduced in July 2022, the windfall tax targets high profits earned by crude oil producers. It was later expanded to include gasoline, diesel, and ATF exports. The policy aims to encourage private refiners to focus on the domestic market rather than selling fuels abroad at higher prices.
- Market Factors: The windfall tax is adjusted every fortnight based on international oil price movements. Recently, crude oil prices have fallen below $80 per barrel due to decreased demand from China and reduced tensions in the Middle East.
This reduction in windfall tax aims to balance the domestic market while responding to the fluctuations in global oil prices.
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