New Delhi: The Indian government has announced the removal of the windfall tax on petroleum crude, reducing it from Rs 4,100 ($50.13) per tonne to zero.

The change is effective from Tuesday onwards, according to a notification from the government. This comes after the windfall tax on domestic crude oil was reduced from Rs 6,400 per tonne to Rs 4,100 per tonne in May. The windfall tax on petrol, diesel, and aviation turbine fuel remains at zero.

Previously, the government had increased the windfall profit tax on domestically produced oil from zero to Rs 6,400 per tonne, while also eliminating the export duty on diesel. The tax rates are reviewed every 15 days based on average oil prices over the past two weeks. The windfall profit tax is calculated by subtracting the producer's price from a set limit.

In July 2022, India joined other countries in imposing a windfall tax on energy companies' supernormal profits. This was in response to private refiners seeking to benefit from strong refining margins in overseas markets. The windfall tax was levied on crude oil producers, and the levy on gasoline, diesel, and aviation turbine fuel exports was extended.

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