IANS | 17 May, 2024
The Central government has cut the windfall tax on petroleum crude to
5,700 rupees ($68.34) per metric ton from 8,400 rupees with effect from
Thursday, as part of its fortnightly revision that is calibrated with
global prices.
This is the second fortnightly cut in windfall tax in a row after a Rs 8,400 per metric ton reduction from Rs 9,600 on May 1.
Upstream
oil exploration and production companies ONGC and Oil India Ltd will
gain as they will have to pay a lower tax on their crude oil output.
The
tax has been scaled down as crude oil prices have declined in the
international market and the earnings of oil producers have also come
down. Prices of the benchmark Brent crude are currently hovering at a
little over $82 per barrel.
The government had on April 16 raised
the windfall tax on petroleum crude to Rs 9,600 a metric ton from Rs
6,800 due to the sharp increase in oil prices at the time.
The
windfall tax on crude was introduced for the first time in July last
year as a sudden spike in prices had increased the earnings of the oil
companies and the government wanted to tap part of this gain to reduce
the fiscal deficit.
The windfall tax was extended to exports of
petrol, diesel and aviation fuel after private refineries started raking
in big gains from overseas markets, instead of selling the fuels in the
domestic market.
The government has left the windfall tax on these fuels unchanged in the current round.
