Government raises windfall tax on petroleum crude to ₹4,900 per tonne

On Friday, March 15, the administration of Narendra Modi raised the windfall tax on crude oil, which will take effect on March 16.

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On Friday, March 15, the administration of Narendra Modi raised the windfall tax on crude oil, which will take effect on March 16.

A formal government decree states that the windfall tax on crude petroleum has gone from ₹4,600 per tonne to ₹4,900 per tonne. Notably, the windfall tax on gasoline, diesel, and aviation turbine fuel (ATF) is still zero and won’t change.

Domestic crude oil is subject to a windfall tax if the global benchmark’s rates increase above $75 per barrel

On July 1, 2022, India implemented a windfall tax for the first time, joining an increasing number of countries that tax energy corporations’ supernormal profits. At that time, export tariffs on gasoline and ATF were ₹6 per litre ($12 per barrel), while those on diesel were ₹13 per liter ($26 per barrel).

The charge is applied to the export of gasoline, diesel, and ATF if the product cracks or margins over $20 per barrel. The distinction between completed petroleum products and crude oil, or raw material, is known as product cracks or margins.

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