Image Source : FREEPIK Oil industry exterior in daylight.
In a move that may lead to lower fuel prices, the Indian government has reduced the windfall tax on domestically produced crude oil to zero, effective from September 18. Previously set at Rs 1,850 per metric ton, this tax cut follows a decline in global crude prices. The decision could bring down the cost of petrol and diesel for consumers.
OMCs may reduce fuel prices
Petroleum Secretary Pankaj Jain had earlier hinted that oil marketing companies (OMCs) would consider reducing fuel prices if crude oil prices remained low for a prolonged period. With the windfall tax now removed, OMCs are likely to evaluate a potential reduction in petrol and diesel prices in the coming days.
Tax revisions and fortnightly reviews
The windfall tax, also known as Special Additional Excise Duty (SAED), is adjusted every two weeks based on average oil prices. The last revision on August 31 had set the windfall tax on crude at Rs 1,850 per tonne, while the SAED on diesel, petrol, and jet fuel exports remained at nil. The new rates take effect from September 18, as per the official notification.
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