Windfall tax on petroleum oil reduced to 17,750 per tonne

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Windfall tax on petroleum oil reduced to 17,750 per tonne

The windfall tax on petroleum crude was raised marginally to 17,750 per tonne from 17,000 per tonne, but the tax on diesel exports was reduced to 5 per liter from 11 per liter. It removed the 4 per litre levy on aviation turbine fuel exports. The new rates will be effective from August 3. The July 19 revision removed the levy on petrol exports. This is the second revision of the windfall levy imposed on July 1. The cess is reviewed fortnightly taking into account global crude prices. The international oil benchmark Brent crude traded marginally up at $102.4 per barrel at the time of press, down from around $104 per barrel on July 21. The government had initially imposed a 23,250 per tonne cess on domestically produced crude oil, but it was reduced to 17,000 per tonne on July 20 due to the softening of global crude oil. The 6 per litre tax on petrol exports was scrapped, while diesel and aviation fuels were reduced by 2 a liter per litre each to 11 and 4, respectively. The finance ministry released a notification late Tuesday evening that the new rates will be in effect from Wednesday. The levy was introduced in order to reduce the windfall gains made by domestic crude producers and refiners due to high global crude and product prices. The windfall levy on locally produced crude oil will be reviewed every fortnight by the government. The levy was expected to provide relief to consumers because of the reduction in the excise duty on petrol and diesel. The reduction in the windfall cess from the initial levels is expected to reduce the realisation for the government.