The ministry of finance announced slight increase in the windfall tax on the sale of domestic crude oil to ₹3,300 per ton, alongside reintroducing a special additional excise duty (SAED) of ₹1.5 per litre on exported diesel. Over the past two weeks, the SAED on locally produced crude oil was set at ₹3,200. The revised duties will be enforced, as stated in a notification by the department of revenue under the finance ministry. There has been no change in the additional excise duty on the export of petrol and aviation turbine fuel, which remains at zero.
The marginal hike in the windfall tax coincides with a period of volatility in the global oil market due to the Red sea crisis. As of February 14th, the Indian crude oil basket, reflecting a blend of sour grade (Oman and Dubai average) and sweet grade (Brent dated) of crude oil processed in Indian refineries, stood at $83.08 a barrel.
The imposition of windfall taxes on locally produced crude oil was initially implemented on July 1, 2022, in response to oil exploration and producing companies reaping significant profits amid multi-year high crude oil prices following Russia’s invasion of Ukraine.
As reported by mint, the decision to levy additional charges on the export of petrol, diesel, and jet fuels came amidst private refiners predominantly selling abroad due to more favorable international prices compared to the domestic market. The additional levies undergo review every fortnight based on average oil prices observed in the preceding two weeks.
