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Business News/ Economy / India raises windfall tax on petroleum crude to 9,600 effective from April 16
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India raises windfall tax on petroleum crude to ₹9,600 effective from April 16

Earlier, on April 4, the government had raised the windfall tax on petroleum crude from ₹4,900 to ₹6,800 per metric ton.

Windfall tax rates are reviewed every fortnight based on average oil prices in the previous two weeks. (MINT_PRINT)Premium
Windfall tax rates are reviewed every fortnight based on average oil prices in the previous two weeks. (MINT_PRINT)

The Indian government announced on April 15, Monday, that it has increased the windfall tax on petroleum crude from 6,800 to 9,600 per metric ton, effective April 16. This tax adjustment, which occurs every two weeks, will remain at zero for diesel and aviation turbine fuel.

Earlier, on April 4, the government had raised the windfall tax on petroleum crude from 4,900 to 6,800 per metric ton. The increase in taxation manifests through the imposition of a Special Additional Excise Duty (SAED) on domestic crude oil producers.

Also read: Oil prices decline as risk premium eases following Iran attack; brent crude at $89.64/bbl

Previously, on March 15, 2024, the Finance Ministry elevated the windfall tax on the sale of domestic crude oil to 4,900 per tonne. This adjustment represented a rise from the prior two weeks' special additional excise duty (SAED) of 4,600 per tonne.

In July 2022, the Indian government introduced a windfall tax targeting crude oil producers. Subsequently, this tax was expanded to cover exports of gasoline, diesel, and aviation turbine fuel (ATF). This policy aims to deter private refiners from capitalizing on elevated global prices by selling these fuels abroad, instead prioritizing domestic market supply. The government adjusts the windfall tax rate every two weeks.

Oil prices surge

On Monday, oil prices experienced a decline, reflecting a market sentiment that appeared to downplay worries about a broader regional conflict following Iran's attack on Israel over the weekend.

Also read: Crude oil prices can hit $100 a barrel if Iran-Israel tensions escalate, say experts

Brent futures for June delivery decreased by 81 cents, approximately 0.9%, reaching $89.64 per barrel by 1335 GMT, while West Texas Intermediate (WTI) futures for May delivery dropped by 69 cents, about 0.8%, settling at $84.97. Oil benchmarks had rallied on Friday in anticipation of Iran's retaliatory move, propelling prices to their highest levels since October.

Iran launched a barrage of more than 300 missiles and drones, representing the initial assault on Israel by a foreign nation in more than thirty years. This incident has raised fears of a broader regional conflict that could disrupt oil transportation throughout the Middle East.

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Published: 15 Apr 2024, 10:58 PM IST
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