Government To Abolish Windfall Tax On Crude Oil Output
New Delhi, 4th April 2023: According to a government notice cited by Reuters Today (April 3), the government has reduced the windfall tax on the production of crude oil from Rs 3,500 per tonne to nil effective immediately.
When it implemented windfall profit taxes for the first time on July 1, 2022, India became one of an increasing number of countries that tax the profits of energy firms. The export tax at the time was Rs 6 per litre for gasoline and ATF and Rs 13 per litre for diesel. Additionally, the government levied a windfall profit tax of Rs 23,250 per tonne on domestic crude output.
The gasoline export tax is calculated based on the margins or cracks that refiners receive from international shipments. These margins are essentially the discrepancy between the realised international energy price and the final price. Every two weeks, the tax rates are reviewed and are typically dependent on the two-week average of oil prices.
Reliance Industries, which runs the biggest single-location oil refinery complex in the world in Gujarat, and Rosneft-backed Nayara Energy are India’s top fuel exporters.
