New Delhi: The Centre has cut windfall tax on locally produced petroleum crude zero to ₹4,100 per tonne. It kept unchanged windfall tax on petrol, diesel and aviation turbine fuel (ATF) at zero.
On 1 May, the Central Board of Indirect Taxes and Customs (CBIC) had lowered the tax on crude oil 4,100 rupees per tonne from 6,400 rupees per tonne.
The tax that is meant to mop up some of the super-profits that producers make during global price surges is revised on a fortnightly basis. The levy was introduced by the government in July last year, following huge gains made by oil producing companies market due to surge in international oil prices amid Russia’s invasion of Ukraine.
Since India follows trade parity pricing of crude oil and petrol, producers of crude oil and refineries that sell finished products, realize global prices in local market. So, the windfall tax on profits of crude oil producers and that of the refiners on exported products enables the government to share a part of the gains from a surge in their global prices.
The cut in windfall tax comes on the back of recent easing of international crude oil prices.
Oil is 11% lower this year as China’s lackluster recovery and a potential US recession weigh on the demand outlook.
On Tuesday, however, global oil prices rose for a second straight day led by America's plans to purchase oil for its Strategic Petroleum Reserve (SPR) and due to raging wildfires in Canada that triggered supply concerns, according to agency reports.
Brent crude futures climbed 30 cents, or 0.4%, to $75.53 a barrel, while U.S. West Texas Intermediate crude was at $71.38 a barrel, up 27 cents, or 0.38%.
Both benchmarks rose more than 1% on Monday, reversing a 3-session losing streak.
