India Removes Windfall Tax on Crude Oil Production

The Centre has withdrawn all windfall tax on crude oil to nil from Rs 3500 per tonne with immediate effect, according to a government notification.

This comes at a time when global crude oil prices rose after the group of oil-producing countries decided to cut output come May this year. The Organisation of the Petroleum Exporting Countries (OPEC) Plus oil producers announced further output cuts of around 1.16 million barrels per day.

India had in July last year imposed the windfall tax on crude oil producers and levies on exports of gasoline, diesel and aviation fuel after private refiners wanted to make gains from robust refining margins in overseas markets, instead of selling it at home.

At that time, export duties of Rs 6 per litre (USD 12 per barrel) each were levied on petrol and ATF and Rs 13 a litre (USD 26 a barrel) on diesel.

Since then, the government from time to time had been reducing the windfall tax on crude oil.

Windfall tax is levied by governments when an industry unexpectedly earns large profits. The tax was levied in July last year as high energy prices led to soaring profits for oil producers.

Also Read: India Garners Pricing Benefits of Crude Oil Imports From Russia