The Union government has reduced the windfall tax on domestically produced crude oil to ₹4,600 per tonne, down from the previous rate of ₹7,000 per tonne. The windfall tax on diesel and aviation turbine fuel (ATF) exports remains at zero.
On July 16, the special additional excise duty (SAED), or windfall tax, was increased by 16.7% to ₹7,000 per tonne for crude oil, while the tax on diesel and ATF was left unchanged at zero.
Initially introduced in July 2022, the windfall tax targeted crude oil producers and was later expanded to include gasoline, diesel, and ATF exports. This policy aims to prevent private refiners from selling these fuels at higher global prices and instead prioritize domestic supply.
The windfall tax is adjusted every fortnight based on international crude and product price movements. It is applied when industries experience unexpected large profits, often due to extraordinary events.
Currently, crude oil prices are trading below $80 per barrel due to reduced demand from China, the world’s largest oil consumer, and decreasing tensions in the Middle East.
