Government hikes windfall tax on crude oil to Rs 7,000 per metric tonne, price to be effective from July 16

The government has raised the windfall tax on petroleum crude to Rs 7,000 per metric tonne from Rs 6,000 per tonne, according to a notification issued on July 15. The new rates will be effective from July 16, according to the release.

The windfall tax is imposed in the form of a Special Additional Excise Duty (SAED). The export of diesel, petrol and Aviation turbine fuel (ATF) has been kept unchanged, according to a PTI report.

Earlier on July 1, the government has increased windfall tax on domestically-produced crude oil to Rs 6,000. This measure was introduced to control private refiners who preferred selling fuel internationally to capitalise on strong refining margins instead of supplying it domestically.

India first imposed windfall profit taxes on July 1, 2022, joining a host of nations that tax supernormal profits of energy companies. The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks.

The central government said that it is necessary to raise this in the public interest, as per the government notification.