Govt to hike Windfall Tax on domestic crude oil by Rs 300/tonne to Rs 4,900/tonne

The government will hike Windfall Tax on domestic crude oil by Rs 300/tonne to Rs 4,900/tonne. The new rates will be effective from Saturday, according to a government notification released on Friday. On March 1, the government increased the windfall tax on petroleum crude to Rs 4,600 a metric ton from Rs 3,300.

Before that on February 16, the government raised the windfall tax on petroleum crude to Rs 3,300 a metric ton from Rs 3,200 and hiked the tax on diesel to Rs 1.5 rupees a litre from zero. The tax is levied in the form of a Special Additional Excise Duty (SAED).

Since July 2022, India has started imposing the windfall tax on crude oil producers and extended the levy on exports of gasoline, diesel and aviation fuel. This practice is followed by many countries that tax supernormal profits of energy companies. The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.

On Thursday, petrol and diesel prices are being reduced by Rs 2 per litre. This is the first pan-India reduction in fuel rates since May 2022. Petrol in Delhi, the national capital, will now cost Rs 94.72 per litre, while customers will have to pay Rs 87.62 for an equal quantity of diesel. The corresponding prices (per litre) in Mumbai will be Rs 102.31 (petrol) and Rs 92.27 (diesel); Rs 104.03 and Rs 90.76 in Kolkata; Rs 100.73 and Rs 92.33 in Chennai; Rs 99.94 and Rs 85.89 in Bengaluru; and, Rs 107.66 and Rs 95.82 in Hyderabad.

“By slashing petrol and diesel prices by Rs 2 (per litre), prime minister Narendra Modi has once again shown that providing welfare and convenience to his family of crores of Indians, has always been his goal,” Puri wrote in a post on X (formerly Twitter).