The central government has reduced the windfall tax on crude petroleum from Rs 8400 per tonne to Rs 5700 per tonne with effect from May 16. However, in its decision, the government has also made it clear that the windfall tax on diesel, petrol and ATF will be zero. There is no change in these. During the last review, on May 1, the tax on petroleum crude was reduced from Rs 9,600 per tonne to Rs 8,400 per tonne. The tax was imposed on crude oil producers and exports of gasoline, diesel and aviation fuel in July 2022, Reuters reported. The windfall tax is revised every two weeks.
Understand Windfall Tax
India began imposing taxes on crude oil producers and exports of gasoline, diesel and aviation fuel in July 2022. Its purpose was to control private refiners who wanted to sell fuel abroad instead of selling it locally to take advantage of strong refining margins. For this reason the government implements windfall tax. The windfall tax was expanded to cover exports of gasoline, diesel, and ATF.
price of crude oil
Crude oil prices fell to a three-month low in US trading on Wednesday. That marked a second straight session of decline, as the International Energy Agency lowered its outlook for global demand this year. Such developments overshadowed preliminary data last week showing a major drawdown in US crude oil reserves. U.S. crude fell 2.2% to $72.72 a barrel, the lowest since Feb. 26, after hitting a session high of $78.71.
Similarly, Brent price fell 2% to $81.08 a barrel on Wednesday, the lowest since February 26, while hitting a session high of $83.03. According to Economies.com, the price of US crude oil fell 1% on Tuesday, while Brent fell 0.8%.
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