In a move that can ease burden on common man’s pocket in near future, the government on Tuesday slashed windfall tax on domestically produced crude oil to ‘nil’ per tonne with effect from September 18. The reduction could make petrol, diesel cheaper.
Last week, Petroleum Secretary Pankaj Jain had said that oil marketing companies would consider reducing fuel prices if crude oil prices remain low for an extended period. Now, with the windfall tax coming to zero, the OMCs may consider reducing the petrol, diesel prices.
The windfall tax, applied as Special Additional Excise Duty (SAED), is revised fortnightly based on average oil prices over the preceding two weeks. The most recent adjustment, effective August 31, set the windfall tax on crude petroleum at ₹1,850 per tonne. The SAED on the export of diesel, petrol, and jet fuel (ATF) remains at ‘nil.’ According to an official notification, the new rates take effect from September 18.
India first introduced windfall profit taxes on July 1, 2022, joining several other nations that tax the extraordinary profits of energy companies.