The government has removed the windfall tax on domestically produced crude oil and exports of petrol, diesel, and aviation turbine fuel, addressing industry demands after falling international oil prices significantly reduced export values. The Department of Revenue announced the decision on Monday, rescinding the June 2022 notifications that imposed the tax, with immediate effect.
“The industry had been urging the government to withdraw the tax, arguing it was no longer justified given the prolonged period of subdued international oil prices,” an official said anonymously.
The windfall tax, introduced in July 2022, aimed to curb private refiners from cutting domestic fuel supplies to profit from surging overseas demand during a time when Brent crude prices were around $110-120 per barrel. However, since August 2024, Brent crude has remained below $80 per barrel, currently around $72.
Latest trade data shows the impact of declining global oil prices, with India’s per-unit petroleum export value dropping to $312.50 per tonne in the first half of 2024-25, compared to $792 per tonne in the same period last year, despite higher export volumes.
