Central Government Lowers Windfall Tax On Crude Petrolium
The central government has decided to further reduce the windfall tax on crude petroleum to Rs. 5,000 per tonne from Rs. 6300 per tonne. The windfall tax imposed on jet fuel has also been lowered to Rs. 1.06 lakh per kiloliter (kL) from Rs. 1.11 lakh/kL.
The windfall tax is changed every two weeks according to the fluctuations in international crude and product prices. Crude oil prices currently stand at $82 per barrel. On November 16, the government lowered the windfall tax on crude petroleum to Rs. 6300 per tonne from Rs. 9800 per tonne.
India imposed a windfall tax on the extra profit earned by oil companies in July 2022, when Russia launched an attack on Ukraine and the crude price in the international market surged exorbitantly. In this scenario, Indian companies incurred heavy profits from exports.
On December 1, the international crude oil price continued its downward trend despite the Organization of Petroleum Exporting Countries and their allies (OPEC+) voluntarily agreeing to cut nearly 1 million barrels a day by early 2024. According to the report, the move failed to attract traders, who are skeptical about the organization”s ability to cut targeted supply.
The benchmark Brent crude currently trades at $82.83 a barrel, down 0.32 percent, on December 1, while West Texas Intermediate (WTI) slipped 0.26 percent. Brent had initially jumped on the news; however, later it failed to gain momentum.
