New Delhi: Centre on Friday increased the windfall tax on the sale of domestic crude oil to ₹10,000 per tonne.
The levy was at ₹6,700 per tonne for the past two weeks. The new rates would be effective from Saturday, 16 September.
Further, in a notification, the ministry of finance said that the special additional excise duty (SAED) or duty on the export of diesel will be reduced to ₹5.50 per litre, from ₹6 per litre. The duty on jet fuel, will be reduced to ₹3.5 per litre from ₹4 per litre. However, the additional duty on the export of petrol will continue at to remain zero.
Centre first imposed the windfall taxes on the sale of locally produced crude oil with effect from July 1, 2022 as oil exploration and producing companies made heavy profits amid multi-year high crude oil prices post Russia’s invasion of Ukraine. Further, the additional levy on the export of petrol, diesel and jet fuels came in as private refiners were largely selling abroad amid better international prices, instead of the domestic market.
The increase in windfall tax on crude comes at a time when crude prices are above $90 per barrel. Brent is currently around $93.7 per barrel.
The prices are rising amid supply concerns as OPEC+ has resorted to supply cuts and Saudi Arabia and Russia have announced voluntary cuts. Further anticipated demand ahead of the upcoming winters due to heating requirements may also keep the price elevated, experts said.
The International Energy Agency had last month said that the output cuts may erode oil inventories for the rest of 2023, potentially driving prices even higher, before economic headwinds limit global demand growth in 2024.