The government increases the windfall tax on crude oil

A government decree issued on Thursday states that, as of March 1, the windfall tax on petroleum crude has increased from Rs 3,300 to Rs 4,600 ($55.51) per metric tonne.

With effect from March 1, the decree said that the Centre also reduced the windfall tax on diesel from 1.50 per litre to zero. Petrol and aircraft turbine fuel will remain tax-free.

The windfall tax on petroleum crude was increased by the government on February 16 from Rs 3,200 to Rs 3,300 per metric tonne, and the tax on diesel was increased from zero to Rs 1.5 per litre.

In response to private refiners’ desire to sell petroleum abroad to benefit from strong refining margins rather than locally, the government levied a windfall tax on producers of crude oil starting in July 2022 and prolonged the duty on exports of petrol, diesel and aviation fuel. The tax is updated by the government every two weeks.

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