Centre reduces windfall tax on oil to ₹10,500 a tonne
For over two weeks, the sale of crude oil produced in India attracted an additional duty of ₹13,300 per tonne
NEW DELHI : The government on Friday lowered the windfall tax on sale of domestic crude oil by a sharp 21% to 10,500 a tonne in line with the reduction in global oil prices seen in the last fortnight, showed an official order.
For over two weeks, the sale of crude oil produced in India attracted an additional duty of ₹13,300 per tonne.
The Centre lowered the special additional excise duty on the export of aviation turbine fuel from ₹9 a litre to ₹5 a litre. The cess remains unchanged.
The government also lowered the special additional excise duty on export of diesel from ₹12 a litre to ₹8.5 a litre. The changes are effective from Saturday.
Crude oil prices have declined in the past two weeks amid demand concerns from China as the country witnesses a surge in Covid-19 cases and fresh lockdowns. China is one of the largest oil importers in the world.
Currently, the November contract of Brent futures on the Intercontinental Exchange is currently at $91.62 per barrel. It has declined around 13% from $105 per barrel on August 31 when the last revision was announced.
Further, anticipation of a steep rake hike by the US Federal Reserve also has supported the prices. Analysts with Nomura recently estimated that the Federal Open Market Committee, the Federal Reserve's policy-setting committee, is likely to raise its short-term interest rate target by a full percentage point at its policy meeting next week due to the emergence of upside inflation risks.
The Federal Open Market Committee will announce its policy decision on 20-21 September. The rate hike by US Fed is likely to be other key central banks including the European Central Bank thereby slowing the growth rate, which eventually would impact crude demand.
However, the energy risks emerging of the Russia-Ukraine conflict would keep the market volatile.
On July 1, Centre imposed an export duty of ₹6 per litre on petrol and ATF and a ₹13 a litre duty on export of diesel. A windfall tax of ₹23,250 per tonne was imposed on the sale of domestic crude.
The taxes were first reviewed on 20 July. Revenue Secretary Tarun Bajaj had said after the imposition of the tax on 1 July that it would be reviewed every 15-days factoring in the foreign exchange rate and global crude prices, among other factors.
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