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Business News/ Economy / Government hikes windfall tax on petroleum crude to 4,600/tonne from March 1
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Government hikes windfall tax on petroleum crude to ₹4,600/tonne from March 1

The government also cut the windfall tax on diesel to zero from 1.50 per litre effective March 1. The tax on petrol and aviation turbine fuel will continue to be zero.

 The tax on petrol and aviation turbine fuel will continue to be nil. (Photo: Reuters)Premium
The tax on petrol and aviation turbine fuel will continue to be nil. (Photo: Reuters)

The government hiked the windfall tax on petroleum crude to 4,600 a metric ton from 3,300 with effect from March 1, according to a government order released on Thursday, February 29. The government also cut the windfall tax on diesel to zero from 1.50 per litre effective March 1, the order showed. The tax on petrol and aviation turbine fuel will continue to be zero.

This is the third time this month that the government hiked windfall tax on domestically produced crude oil. On February 15, the windfall tax was raised to 3,300 per tonne from 3,200 per tonne and the tax on diesel was raised to 1.5 a litre from zero.

Also Read: Government marginally raises windfall tax on domestic crude oil

India imposed a windfall tax on crude oil producers from July 2022 and extended the levy on exports of gasoline, diesel and aviation fuel, as private refiners wanted to sell fuel overseas to gain from robust refining margins instead of selling locally. The government revises the tax fortnightly based on average oil prices in the previous two weeks.

Going ahead volatility in the international crude oil prices is expected to continue with the Organization of the Petroleum Exporting Countries (OPEC) anticipating a robust demand in the oil market in 2024 and 2025. However, international crude oil prices have not risen significantly after the Red Sea crisis.

On Thursday, Brent crude futures for April were down two cents at $83.66 a barrel. The April contract expires on Thursday and the more active May contract was up two cents at $82.17. US West Texas Intermediate crude futures rose 25 cents to $78.79. Brent has hovered comfortably above the $80 mark for three weeks, with the Middle East conflict having only a modest impact on crude flows. With the demand outlook remaining uncertain, analysts think OPEC will extend the current supply agreement to the end of the second quarter.

 

 

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Published: 29 Feb 2024, 11:05 PM IST
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