Government slashes windfall tax on crude to Rs 6,300 per tonne, halves diesel

Government on Thursday, November 16, massively slashed windfall tax on domestically produced crude oil and diesel prices amid softness in crude prices in international markets.

Government slashed Special Additional Excise Duty (SAED) also known as windfall tax to Rs 6,300 per tonne from Rs 9,800 per tonne on October 31. The government also cut SAED on diesel to 1 rupee per litre from Rs 2.

Meanwhile, the SAED on aviation turbine fuel (ATF) and petrol have been kept unchanged at nil.

Oil prices fell on Thursday, extending losses from the previous session, as signals of higher supply from the United States met worries about lacklustre energy demand from China.

Brent futures were down 48 cents at $80.70 a barrel at 0630 GMT. U.S. West Texas Intermediate crude (WTI) shed 53 cents to $76.13 a barrel.

Both benchmarks fell more than 1.5% in the prior session.

WTI's front-month contract also traded below the price for the second month, a structure known as contango, suggesting that investors expect prices to increase. The front month's discount to the second month traded at minus 17 cents on Thursday.

Government introduced windfall profit taxes for the first time in July last year. Since then, the centre has been reviewing the levies every fortnight.

(With Reuters inputs)