Centre Slashes Windfall Tax on Crude from ₹8,200 to ₹5,700/MT

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Synopsis:

India lowers windfall tax on petroleum crude to ₹5,700/MT from ₹8,400, effective May 16. Taxes for diesel and ATF remain unchanged. The tax, revised every two weeks, regulates private refiners amidst fluctuating global oil prices.

Crude Oil News Today

India has decreased the windfall tax on petroleum crude from ₹8,400 to ₹5,700 per metric ton, effective May 16. This move comes amid ongoing efforts to regulate the oil market and ensure stable prices and a steady supply of petroleum products to consumers.

Additional ReadCommodities Market Today

Previous Changes in Windfall Tax

The windfall tax, which is subject to revision every two weeks, witnessed a similar reduction on May 1, only to be increased again shortly afterwards. In April 2024, the tax underwent multiple adjustments, initially rising from ₹4,900 to ₹6,800 per metric ton before reaching ₹9,600.

Additional Read: Understanding the Surge in Windfall Tax

What is the Windfall Tax?

Introduced in July 2022, the windfall tax targets crude oil producers and exporters of gasoline, diesel, and aviation fuel. Its primary objective is to regulate private refiners and deter them from prioritising overseas sales over domestic supply, especially during periods of high refining margins.

Additional Read: What is a Windfall Tax in India?

Global Oil Prices

Meanwhile, global oil prices continue to climb, backed by indicators of increased demand in the United States and data suggesting slower inflation than anticipated. These developments underscore the importance of measures such as the windfall tax in stabilising the energy market and mitigating volatility.

Additional Read: Oil and Financial Markets

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