The windfall tax on production of domestic crude oil has been hiked to Rs 6,400 per tonne, according to a report by Moneycontrol.
The move came a fortnight after government had cut the windfall profit tax on domestically produced crude oil to zero and halved the levy on the export of diesel to Rs 0.50 per litre in line with softening international oil prices.
The levy on crude oil produced by companies such as Oil and Natural Gas Corporation (ONGC) was reduced to nil from Rs 3,500 per tonne ($5.8 per barrel), the order dated April 3 said.
The upward revision in windfall tax came after oil prices firmed upwards after US crude inventories were seen falling and on strong Chinese economic data, signalling strengthening fuel demand, news agency Reuters reported.
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Brent crude futures gained 7 cents to $84.84 a barrel and West Texas Intermediate U.S. rose 3 cents to $80.89 a barrel.
The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks. The Government's collection from the SAED imposed on the production of crude oil and the export of petroleum products from July 1, 2022, is estimated at around Rs 40,000 crores in FY2023. Crude oil pumped out of the ground and from below the seabed is refined and converted into fuels like petrol, diesel and aviation turbine fuel (ATF).
India first imposed windfall profit taxes on July 1 last year, joining a growing number of nations that tax supernormal profits of energy companies. At that time, export duties of Rs 6 per litre ($12 per barrel) each were levied on petrol and ATF and Rs 13 a litre ($26 a barrel) on diesel.
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(With PTI inputs)
