India raises crude oil windfall tax, cuts diesel export tax

NEW DELHI: India raised its windfall tax on crude oil marginally while cutting the tax on exports of diesel, according to a government notification on Saturday.

The windfall tax on crude was raised to 4,400 rupees ($53.87) per tonne from 4,350 rupees, effective immediately 4, while the tax on diesel export was cut to 0.5 rupees per litre from 1.5 rupees a litre.

The government said it scrapped a windfall tax of 1.5 rupees a litre on aviation turbine fuel.

The government imposed the taxes on crude and export of petroleum products in July to raise additional revenue from a sudden rise in profits of oil companies as global crude prices surged on Russia’s invasion of Ukraine, aiming to partly meet higher food and fertiliser subsidies.

The tax is revised every fortnight, based on the international crude oil prices.

The government expects to raise nearly 250 billion rupees ($3.1 billion) from the tax in the financial year through this month, and about 3.20 trillion rupees from factory gate duties on petroleum products.

Industrial chambers including Federation of Indian Chambers of Commerce and Industry and some oil companies have asked the government to scrap the windfall profit tax on local crude oil producers, saying it was hitting investments in the sector.