• India cuts windfall tax on crude petroleum, hikes it for diesel

    The union government on Monday reduced the windfall tax on domestic production of crude petroleum to Rs 3,500 per tonne from Rs 4,400 per tonne. On the other hand, the centre has marginally increased export duty on diesel to Rs one per litre from Rs 0.50 while keeping both petrol and Aviation Turbine Fuel (ATF) exempt from the export levy.

    The new rate is set to be effective from Tuesday, March 21. Earlier on March 4, the centre had marginally hiked windfall tax to Rs 4,400 per tonne from Rs. 4,350 per tonne whereas the export duty on diesel was slashed to Rs 0.5 per litre. The windfall tax is usually revised every fortnight and the latest update was expected between March 15-16.

    Prior to this decision, the windfall tax on crude has been reduced by Rs 500 per tonne, diesel by Rs 5 per litre, and ATF by Rs 1 per litre in 2023. The Special Additional Excise Duty (SAED), also known as Windfall tax, is levied by governments when an industry unexpectedly earns large profits. India first imposed windfall profit taxes on July 1 last year.

    Over the past two weeks, prices of both Brent and Nymex Crude are down over 12 percent. This has led shares of Oil Marketing Companies (OMCs) like Indian Oil, HPCL and BPCL gain in the range of 1-8 percent last week.

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