Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Politics / Policy/  Centre reduces windfall tax on oil to 10,500 a tonne
BackBack

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

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. (REUTERS)Premium
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. (REUTERS)

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.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Gireesh Chandra Prasad
Gireesh has over 22 years of experience in business journalism covering diverse aspects of the economy, including finance, taxation, energy, aviation, corporate and bankruptcy laws, accounting and auditing.
Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 17 Sep 2022, 06:48 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App