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Windfall profit tax on crude oil hiked to Rs 10,200 per tonne and cut for diesel exports

New Delhi: The central government announced a cut in duty on export of diesel, while raising the windfall profit tax on domestically produced crude oil. The new rates will be applicable from today i.e. 17th November. The windfall tax on crude oil produced by firms such as state-owned Oil and Natural Gas Corporation (ONGC) has been increased from Rs 9,500 per tonne to Rs 10,200 per tonne with effect from November 17.

By Priyanka Verma 
Updated Date

New Delhi: The central government announced a cut in duty on export of diesel, while raising the windfall profit tax on domestically produced crude oil. The new rates will be applicable from today i.e. 17th November. The windfall tax on crude oil produced by firms such as state-owned Oil and Natural Gas Corporation (ONGC) has been increased from Rs 9,500 per tonne to Rs 10,200 per tonne with effect from November 17. This information has been given in a government notification.

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In a 15-day review of windfall tax, the government reduced the duty on export of diesel from Rs 13 per liter to Rs 10.5 per litre. The duty on diesel includes road infrastructure cess of Rs 1.50 per litre. There has been no change in the export duty on jet fuel or Aviation Turbine Fuel (ATF), which was fixed at Rs 5 per liter in the last review on November 1.

When the export duty was first imposed, a windfall tax was levied on exports of petrol along with diesel and ATF. But later during the fortnightly review the tax on petrol was removed. While windfall profit tax is calculated by removing any cost that producers are getting above a threshold. The tax on fuel exports is based on the margin that oil refinery companies earn through overseas shipments. These margins are mainly the difference between international oil price and cost.

India imposed a windfall profits tax for the first time on July 1, joining a growing number of countries that tax super ordinary profits of energy companies. At that time, an export duty of Rs 6 per liter ($12 per barrel) was imposed on petrol and aviation turbine fuel and Rs 13 per liter ($26 per barrel) on diesel. Also, a windfall profit tax of Rs 23,250 per tonne ($40 per barrel) was imposed on domestic crude oil production. In the previous rounds, the fee was partially adjusted on July 20, August 2, August 19, September 1, September 16, October 1, October 16 and November 1.

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