Windfall tax on crude slashed to Rs 5,200 per ton

The Indian government has announced a reduction in the windfall tax on petroleum crude to Rs 5,200 ($62.33) per metric ton, down from Rs 5,700 rupees, effective June 1. This change was detailed in a notification issued on Friday. The windfall tax, which is adjusted biweekly, remains unchanged at zero for both diesel and aviation turbine fuel.

Previously, on May 16, the government had reduced the windfall tax on petroleum crude from Rs 8,400 to Rs 5,700 per metric ton. Before that, on May 1, the tax had been lowered from 9,600 rupees to 8,400 rupees per metric ton.

India began imposing this tax on crude oil production and the export of gasoline, diesel, and aviation fuel in July 2022. The measure was intended to manage private refiners who preferred exporting fuel to benefit from high refining margins rather than supplying it locally.