scorecardresearchWindfall profit tax cut on domestic crude oil, diesel; scrapped for ATF

Windfall profit tax cut on domestic crude oil, diesel; scrapped for ATF

Updated: 02 Oct 2022, 09:34 AM IST
TL;DR.
At the sixth fortnightly review, the government reduced the tax on domestically-produced crude oil to 8,000 per tonne from 10,500 per tonne.
FILE - A pump jack extracts crude oil at an oil field near wind turbines in Emlichheim, Germany, March 18, 2022. Most major countries are finding it easier to promise to fight climate change than actually do it. Experts tracking action to reduce carbon emissions say of the major economies only the European Union is close to doing what's necessary to limit global warming to a few more tenths of a degree. (AP Photo/Martin Meissner, File)

FILE - A pump jack extracts crude oil at an oil field near wind turbines in Emlichheim, Germany, March 18, 2022. Most major countries are finding it easier to promise to fight climate change than actually do it. Experts tracking action to reduce carbon emissions say of the major economies only the European Union is close to doing what's necessary to limit global warming to a few more tenths of a degree. (AP Photo/Martin Meissner, File)

(PTI) The government cut the windfall profit tax on locally-produced crude oil and diesel on Saturday, in line with a fall in international rates, and scrapped the levy on the export of jet fuel with effect from October 2.

At the sixth fortnightly review, the government reduced the tax on domestically-produced crude oil to 8,000 per tonne from 10,500 per tonne.

The levy on the export of diesel was reduced to 5 per litre from 10 per litre.

The tax at the rate of 5 a litre on Aviation Turbine Fuel (ATF) exports was scrapped with effect from October 2, according to a finance ministry notification issued late Saturday night.

The reduction in the tax rates follows the easing of crude oil prices in international markets.

While private refiners Reliance Industries Limited and Rosneft-based Nayara Energy are the principal exporters of fuels like diesel and ATF, the windfall levy on domestic crude targets producers like state-owned Oil and Natural Gas Corporation (ONGC) and Vedanta Limited.

India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super normal profits of energy companies. But international oil prices have cooled since then, eroding the profit margins of both oil producers and refiners.

Export duties of 6 per litre (USD 12 per barrel) were levied on petrol and ATF and 13 a litre (USD 26 a barrel) on diesel.

A 23,250 per tonne (USD 40 per barrel) windfall profit tax on domestic crude production was also levied.

The duties were partially adjusted in the previous five rounds on July 20, August 2, August 19, September 1 and September 16 and were removed for petrol.

First Published: 02 Oct 2022, 09:34 AM IST