India’s central government has slashed the windfall tax on crude oil producers and exempted petrol, diesel and jet fuel from an export levy, likely resulting in a price drop that may provide some relief to consumers. The tax cut was announced just weeks after the government imposed the two charges, in line with a decline in international rates. Companies including Reliance Industries, Oil and Natural Gas Corp and Oil India Ltd are expected to benefit from the decision.
The government reduced the windfall tax on diesel and aviation turbine fuel (ATF) by INR 2 a litre and scrapped a INR 6 per litre tax on export of petrol. The tax on ATF has now been cut to INR 4 a litre from INR 6 and on diesel to INR 11 from INR 13 per litre, according to Finance Ministry notifications.
Further, the INR 23,250 per tonne additional tax on crude oil produced domestically has been cut to INR 17,000 per tonne.
