In response to private refiners seeking to capitalize on strong refining margins by selling fuel internationally, the central government has announced an increase in the windfall tax on domestically produced crude oil. Effective July 16, the tax will be raised to Rs 7,000 per tonne from the previous Rs 6,000 per tonne. This tax is implemented as a Special Additional Excise Duty (SAED).
This adjustment follows an earlier revision on July 1, when the windfall tax on petroleum crude was increased to Rs 6,000 per metric tonne from Rs 3,250. The policy aims to discourage private refiners from selling fuel abroad at high margins and instead ensure an adequate supply within the domestic market.
Despite these changes, the export duty on diesel, petrol, and Aviation Turbine Fuel (ATF) will remain at zero. India initially imposed a windfall tax on crude oil producers in July 2022 and extended this levy to exports of gasoline, diesel, and aviation fuel. The government reviews and adjusts this tax every fortnight to respond to market conditions and prevent fuel shortages in the domestic market.
