Countries around the world are being affected by the ongoing conflict between America and Iran. Due to this situation the prices of crude oil have increased. Following the rise in crude oil prices, the central government has increased the windfall tax on exports of diesel and aviation turbine fuel (ATF), while reducing the tax on exports of petrol. According to the notification issued by the Finance Ministry, the new rates will be applicable from Thursday (July 16).
The government has increased the tax on export of diesel from ₹8.5 per liter to ₹15.5 per liter and the tax on export of ATF from ₹7.5 per liter to ₹14.5 per liter. In contrast, duty on export of petrol has been reduced from ₹4 per liter to ₹2.5 per litre.
**Increase in Brent crude prices**
The government periodically reviews the windfall tax based on the price of crude oil in the international market and the company’s profits; The new rates have been announced under this process. July saw a sharp rise in crude oil prices, with Brent crude rising nearly 17 percent. This follows consecutive declines in April, May and June.
Brent crude prices rose nearly 2 percent to $84.73 a barrel. One of the main reasons for this is the increasing tension between America and Iran. Concerns about oil supply have increased after American steps against Iran. Additionally, the conflict in the Strait of Hormuz has increased risks, disrupting fuel supplies.
It is noteworthy that on July 1, government oil companies had reduced the price of ATF by about ₹ 5 per liter after the fall in international market rates. Now, with the rise in crude oil prices, the government has implemented these new changes in the windfall tax.
