India raised the windfall tax on petroleum oil to Rs 3,200 per tonne on Saturday, a considerable increase from the previous rate of Rs 1,700. Furthermore, the windfall tax on diesel and aviation turbine fuel remains unchanged, at zero, as stated by the government late last Friday.
This development follows a preceding decision on 16 January, where the government opted to reduce the windfall tax on petroleum crude from Rs 2,300 per ton.
Additionally, the genesis of this tax policy traces back to July 2022 when India introduced a windfall tax on crude oil producers. Simultaneously, the government extended the levy on exports of gasoline, diesel, and aviation fuel.
The motive was to curtail the inclination of private refiners to exploit lucrative refining margins by exporting fuel overseas rather than catering to domestic demands.
Further, the government has been consistently reviewing and adjusting the windfall tax every two weeks, demonstrating an approach to navigating the evolving landscape of the energy market.
