India Raises Crude Oil Windfall Tax To INR 9,600 From April 16
Indian government raises windfall tax on crude oil to INR 9,600 per metric ton to stabilize domestic fuel prices.
The Indian government announced on April 15 that it is raising the tax on crude oil from INR 6,800 to INR 9,600 per metric ton, starting April 16. This tax adjustment happens every two weeks. However, the tax remains zero for diesel and aviation turbine fuel.
Earlier, on April 4, the government had increased the tax from INR 4,900 to INR 6,800 per metric ton. This rise in taxation is applied through a special additional excise duty on domestic crude oil producers.
On March 15, 2024, the finance ministry had raised the tax on the sale of domestic crude oil to INR 4,900 per tonne from the prior two weeks' SAED of INR 4,600 per tonne.
In July 2022, India introduced a windfall tax targeting crude oil producers. This tax was later expanded to cover exports of diesel, gasoline, and aviation turbine fuel. The aim is to discourage private refiners from selling these fuels abroad at high prices and instead focus on supplying the domestic market.
Oil prices saw a decline on Monday following Iran's attack on Israel over the weekend. Brent futures for June delivery dropped to $89.64 per barrel, and West Texas Intermediate futures for May delivery fell to $84.97 per barrel. This came after prices surged on Friday due to anticipation of Iran's retaliatory move against Israel.
Iran's attack on Israel involved more than 300 missiles and drones. It raised concerns about a broader regional conflict that could disrupt oil transportation in the middle east. This was the first assault on Israel by a foreign nation in over thirty years.
The increase in the windfall tax in India aims to regulate the prices of crude oil and related products domestically while global oil prices fluctuate due to geopolitical tensions.
