New Delhi
In a recent fortnightly review, the central government has taken the decision to reduce the windfall tax on domestic crude oil. The tax rate has been adjusted from Rs 12,200 per tonne to Rs 9,050 per tonne, providing a positive impact on upstream oil companies, including ONGC and Oil India Ltd (OIL). This decision comes after the windfall tax on petroleum crude was raised to Rs 12,100 per tonne from Rs 10,000, with effect from September 30, due to a spike in oil prices, which had reached $95 a barrel at the time. Subsequently, oil prices experienced fluctuations, and they have recently shown an upward trend, partly influenced by the Israel-Hamas conflict. Furthermore, the windfall tax on aviation turbine fuel has also been reduced, decreasing from Rs 3.50 per liter to Re 1. Additionally, the tax on diesel has been adjusted from Rs 4 per liter to Rs 3. These changes are expected to benefit downstream oil refiners, particularly those involved in exporting petroleum products. The windfall tax was originally introduced by the government in July last year, and its scope was extended to include exports of gasoline, diesel, and aviation fuel. This extension was primarily in response to private refiners benefiting from strong refining margins in overseas markets, as opposed to selling domestically.
