The government cut the windfall profit tax on crude oil and diesel made in the country on Saturday, which was in line with a drop in international prices, and it got rid of the tax on exporting jet fuel on October 2. At the sixth review every two weeks, the government cut the tax on crude oil made in the country from Rs 10,500 per tonne to Rs 8,000 per tonne.
The tax on diesel exports went from Rs 10 per litre to Rs 5 per litre. A notification from the finance ministry late Saturday night said that the tax of Rs 5 per litre on exports of aviation turbine fuel (ATF) would no longer be in place as of October 2.
The tax rates have gone down because the price of crude oil has gone down on international markets. Fuels like diesel and ATF are mostly exported by private refiners like Reliance Industries Limited and Rosneft-based Nayara Energy. But the windfall levy on domestic crude is meant for producers like the Oil and Natural Gas Corporation (ONGC), which is owned by the government, and Vedanta Limited.
India started taxing energy companies’ “windfall profits” for the first time on July 1, joining a growing number of countries that do this.
But since then, oil prices on the world market have gone down, which has cut into the profits of both oil producers and refiners. Petrol and ATF had export duties of Rs 6 per litre (USD 12 per barrel), and diesel had export duties of Rs 13 per litre (USD 26 per barrel).
A windfall profit tax of Rs 23,250 per tonne (USD 40 per barrel) was also put on crude oil made in India. In the five rounds before, on July 20, August 2, August 19, September 1, and September 16, some of the duties were changed, and the tax on gasoline was taken away.
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