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regular-article-logo Wednesday, 24 April 2024

Windfall tax on crude hiked after prices rise, Opec+ to keep its oil output policy unchanged

The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks

Our Special Correspondent New Delhi Published 04.02.24, 09:01 AM
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The government has hiked windfall tax on domestically produced crude oil to Rs 3,200 per tonne from Rs 1,700 per tonne with effect from Saturday as oil prices rose following a decision by Opec+ to keep its oil output policy unchanged.

The tax is levied in the form of Special Additional Excise Duty (SAED).

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According to an official notification, SAED on export of diesel, petrol, and jet fuel or ATF, has been retained at nil.

The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.

The average price of the Indian basket of crude in January was $79.22 per barrel, up from $74.42 in December.

India first imposed windfall profit taxes on July 1, 2022, joining a growing number of nations that tax supernormal profits of energy companies.

At that time, export duties of Rs 6 per litre ($12 per barrel) each were levied on petrol and ATF and Rs 13 a litre ($26 a barrel) on diesel.

The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks. A windfall tax is levied on domestic crude oil if rates of the global benchmark rise above $75 per barrel.

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