Image Source: TwitterAccording to an official decree, the Central government reduced the windfall profit tax charged on locally produced crude oil, as well as the export of diesel and aviation turbine fuel (ATF), in response to rising worldwide oil prices.
The charge on crude oil produced by firms like as Oil and Natural Gas Corporation (ONGC) has been reduced from ₹5,050 to ₹4,350 per tonne, according to the directive.
The government has also reduced the tariff on fuel exports from ₹7.5 to ₹2.50 per litre. Petrol still has no specific extra excise duty.
Meanwhile, the tariff on ATF shipments to other countries has been reduced from ₹6 to ₹1.50 per litre.
The new tax rates went into effect on February 16th.
Crude oil extracted from the ground and beneath the seabed is processed and transformed into fuels such as gasoline, diesel, and ATF.
On July 1, 2022, India enacted the first windfall profit taxes, joining a growing number of countries that tax supernormal earnings of energy corporations. At the time, export tariffs on petrol and ATF were ₹6 per litre ($12 per barrel), while diesel was ₹13 per litre ($26 per barrel).
The fee is evaluated every two weeks, and rates are adjusted in accordance with world oil prices.
Reliance Industries Ltd, which operates the world’s biggest single-location oil refinery complex in Jamnagar, Gujarat, and Rosneft-backed Nayara Energy are the country’s principal fuel exporters.
The government taxes oil companies’ windfall gains at any price above a certain threshold of $75 per barrel.
The tariff on petroleum exports is calculated using the cracks or margins earned by refiners on international sales. These margins are largely the difference between the realised international oil price and the cost.
