New Delhi, Jun 15, 2024, IANS

New Delhi, June 15 (IANS) The Government has reduced the windfall tax on petroleum crude to Rs 3,250 per metric tonne from Rs 5,200 with effect from June 15 as prices of crude oil have declined in the international market compared to the previous fortnight. Upstream oil exploration and production companies ONGC and Oil India Ltd will benefit from the announcement as they have to pay the windfall tax on their crude oil output. The tax is revised every fortnight based on the average crude price of the preceding fortnight. In the earlier fortnight beginning June 1, the government had reduced the windfall tax on crude to Rs 5,200 per metric tonne from Rs 5,700. The windfall tax on crude was as high as Rs 8,400 in the first fortnight of May as part of its fortnightly revision that is calibrated with global prices. This is the second fortnightly cut in windfall tax in a row after a Rs 8,400 per metric tonne reduction from Rs 9,600 on May 1. From July 2022, India started taxing crude oil production and exports of gasoline, diesel and aviation fuel to regulate private refiners which wanted to sell fuel overseas instead of locally to gain from robust refining margins. The government had on April 16 raised the windfall tax on petroleum crude to Rs 9,600 a metric ton from Rs 6,800 because of the high crude oil prices at the time due to escalating geopolitical tensions. Crude prices had risen by 16 per cent in the first quarter of 2024 but have trended downward since then. The windfall tax was also extended to exports of petrol, diesel and aviation fuel after private refineries started raking in big gains from overseas markets, instead of selling the fuels in the domestic market. The government has left the windfall tax on these fuels unchanged in the current round.