Government Increases Windfall Export Tax Rates Amid Rising Crude Prices
Higher under-recoveries keep Street cautious on OMCs amid crude surge
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The Indian government has significantly increased windfall export tax rates on diesel and aviation turbine fuel (ATF) due to surging crude oil prices. The diesel tax has risen to ₹55.5 per litre (approximately $95 per barrel), while the ATF tax is now ₹42 per litre (around $72 per barrel), impacting the operations of oil marketing companies (OMCs).
- 01Windfall export tax on diesel increased to ₹55.5 per litre.
- 02Aviation turbine fuel (ATF) tax raised to ₹42 per litre.
- 03Tax adjustments will occur on a fortnightly basis.
- 04Domestic ATF price increase is capped at 25% per month.
- 05Petrol remains exempt from these new tax rates.
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In response to rising crude oil prices, the Indian government has revised the windfall export tax rates for oil marketing companies (OMCs). The tax on diesel has surged to ₹55.5 per litre (approximately $95 per barrel), a significant increase from the previous rate of ₹21.5 per litre (or $36 per barrel). Similarly, the tax on aviation turbine fuel (ATF) has been raised to ₹42 per litre (around $72 per barrel), up from ₹29.5 per litre (or $50 per barrel). The government has implemented a cap of 25% on the monthly price increase for domestic ATF consumption, while petrol remains exempt from these tax hikes. These taxes will be adjusted every two weeks, reflecting the volatile nature of global oil prices.
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The increased windfall export tax rates may lead to higher fuel prices for consumers and impact the operational costs for oil marketing companies (OMCs) in India.
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