Government Slashes Windfall Tax On Crude Oil To Rs 1,700 Per Tonne Effective Today

The Indian government on Monday slashed the windfall tax on petroleum crude to Rs 1,700 ($20.53) per tonne from Rs 2,300 a tonne. The new rate is effective from today (January 16). The windfall tax has been reduced from Rs 2,300 per tonne to Rs 1,700 per tonne, according to a gazette notification issued on Monday.

The windfall tax has been reduced from Rs 2,300 per tonne to Rs 1,700 per tonne, according to a gazette notification issued on Monday.

Earlier, on January 2, India raised the windfall tax on petroleum crude oil to Rs 2,300 a tonne from Rs 1,300 a tonne. Starting in July 2022, the government levied a windfall tax on crude oil producers and extended the levy on exports of gasoline, diesel, and aviation fuel as private refiners wanted to sell fuel overseas to make gains from strong refining margins instead of selling within the country. It revises the tax fortnightly.

With the imposition of windfall profit taxes on July 1 last year, India has joined the list of other countries that tax the supernormal profits of energy companies.

Oil Prices Today, Jan 16, 2024:

Oil prices were mixed on Tuesday, following losses in the previous session, as investors weighed broad economic concerns against weather-related demand-supply issues in the US and continued tensions in the Middle East that led to more tanker diversions, reported Reuters.

Brent crude futures rose 0.06%, to $78.20 per barrel at 0334 GMT, while US West Texas Intermediate (WTI) crude fell 0.28%, at $72.48 a barrel after a US public holiday on Monday.

In the Middle East, Yemen's Houthi movement will expand its targets in the Red Sea region to include US ships, an official from the Iran-allied group was quoted by Reuters.

More oil tankers were steering clear of the southern Red Sea on Monday due to the disruptions, increasing the cost of shipping and the time it takes to move oil from one place to another.

Oil prices rose 2% last week amidst the rising conflict in the region, but the lack of direct impact on oil production could be limiting gains, according to analysts.