India removes windfall tax on production of crude oil

Guwahati: The Center has reduced all windfall taxes on crude oil from Rs 3500 per tonne to nil with immediate effect, according to a government notification.

This occurs after the group of oil-producing nations resolved to reduce output beginning in May of this year, which led to an increase in crude oil prices worldwide. Producers of oil from the Organisation of the Petroleum Exporting Countries (OPEC) Plus group announced additional reductions in production of about 1.16 million barrels per day.

India had imposed the windfall tax on crude oil producers and levies on the exports of gasoline, diesel, and aviation fuel in July of last year as a result of private refiners wanting to profit from high refining margins in foreign markets rather than selling it domestically.

The export taxes at the time were Rs 6 per litre (USD 12 per barrel) for petrol and ATF and Rs 13 per litre (USD 26 per barrel) for diesel.

Since that time, the government has periodically decreased the windfall tax on crude oil.

Governments impose windfall taxes when an industry unexpectedly makes substantial profits. The levy was imposed in July of last year when oil companies saw their earnings jump as a result of high energy prices.

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