Updated February 3rd, 2024 at 15:45 IST
Government raises windfall tax on crude oil to Rs 3,200 per ton
The government extended the levy to cover exports of gasoline, diesel, and aviation fuel.
Windfall tax revised: In a recent development, the government announced an increase in the windfall tax on petroleum crude from Rs 1,700 per ton to Rs 3,200 per ton, effective from Saturday. This adjustment follows the government's decision on January 16 to reduce the windfall tax on petroleum crude from Rs 2,300 per ton. Notably, the windfall tax on diesel and aviation turbine fuel remains unchanged, maintaining a zero rate.
The windfall tax initiative was introduced in July 2022, targeting crude oil producers. The government extended the levy to cover exports of gasoline, diesel, and aviation fuel. This measure aimed to curb private refiners' preference for selling fuel overseas to capitalise on robust refining margins instead of catering to the domestic market.
Dynamic nature of sector
The government's decision to revise the windfall tax every two weeks aims to adapt to the dynamic nature of the oil and gas sector. This flexibility allows for strategic adjustments that align with market conditions and the broader economic landscape.
The increase in the windfall tax on petroleum crude signals a proactive approach by the Indian government to manage revenues and balance the interests of both domestic and international stakeholders in the energy sector. As India continues to navigate the complexities of the global oil market, these policy measures play a crucial role in maintaining fiscal stability and fostering a competitive environment within the industry.
(with Reuters inputs)
Published February 3rd, 2024 at 14:34 IST