Govt slashes windfall tax on crude oil to Rs 2,100 per tonne

Earlier on July 31, windfall tax or special additional excise duty (SAED) was lowered by 34.3 percent to Rs 4,600 per tonne on crude oil from Rs 7,000 while tax on diesel and ATF was left unchanged at zero.

In July 2022, the Union government introduced a windfall tax or SAED that targeted crude oil producers.

Later, this tax was expanded to include gasoline, diesel, and aviation turbine fuel (ATF) exports, as per reports.

The primary objective of this government policy is to discourage private refiners from selling these fuels abroad at higher global prices and instead prioritize the domestic market supply, according to Moneycontrol.

The windfall tax or SAED is revised every fortnight based on the movement of international crude and product prices.

A windfall tax is levied by governments when an industry unexpectedly earns large profits — primarily due to an unprecedented event, reports Moneycontrol.

Crude oil prices have been trading below $80 per barrel amid demand worries from China, the largest oil consumer in the globe, and fading tensions in the Middle East, as per reports.