Windfall tax revision: The government increased the windfall tax on petroleum crude, raising it to Rs 4,600 per metric tonne from the previous Rs 3,300, effective today, March 1, as per an official order.

Simultaneously, the government slashed the windfall tax on diesel entirely, effective March 1, down from Rs 1.50 per litre previously taxed.

Notably, the tax remains at zero for petrol and aviation turbine fuel.

This marks the third adjustment in February alone where the government has raised the windfall tax on domestically produced crude oil. 

Earlier in the month, on February 15, the tax was escalated to Rs 3,300 per tonne from Rs 3,200, while the tax on diesel was hiked to Rs 1.5 per litre from zero.

The government implemented the windfall tax on crude oil producers in July 2022 and expanded its application to include exports of gasoline, diesel, and aviation fuel. 

The move came as private refiners sought to capitalise on strong refining margins by selling fuel abroad rather than domestically. The government revises the tax bi-weekly, taking into account average oil prices from the previous two weeks.