The Central Board of Indirect Taxes and Customs (CBIC) said that the rates will be effective June 15, 2024.

Indian Government has announced a reduction in the windfall tax on petroleum crude, lowering it to 3,250 Indian rupees per metric ton from the previous rate of 5,200 rupees. The Central Board of Indirect Taxes and Customs (CBIC) said that the rates will be effective June 15, 2024.

The adjustment outlined in a notification marks a continuation of fortnightly reviews based on international Crude oil prices.  This revision follows a prior reduction on June 1 when the tax was decreased from 5700 rupees to 5200 rupees per metric ton. Diesel and aviation turbines remain untaxed under the current regime.

In July 2022, the government initiated the windfall tax aimed at regulating private refineries and ensuring competitive refining margins amid global market fluctuations. These measures are part of India’s broader strategy to effectively manage domestic and export fuel sales.

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In the international market, the windfall tax peaked on April 16 when it was raised to Rs 9,600 per ton from 6,800 rupees after firming crude oil prices. India’s crude oil imports in the month of April have surged to a two-year high of 5.2 million bar.

In an OPEC Monthly Oil Market report,  India also saw the highest product imports in six just under 1.3 mb/d. This uptick is attributed to the heightened economic activity and preparations for the elections at that time. The report noted that there was a remarkable growth in the demand for crude and refined products in India understanding the crucial role of oil in its transportation reflecting the country’s expanding economic activities.

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