According to a government notification, the Indian government announced the elimination of the windfall tax on crude oil, which had been set at INR1,850 per tonne on Tuesday, 17 September 2024. The new policy will take effect from today, 18 September 2024.
This marks the second time the tax has been reduced to zero since its implementation. The first reduction to nil occurred on 4 April 2023.
India introduced windfall profit taxes on 1 July 2022, aligning with other countries that tax the excessive profits of energy companies. The levy on exports of petrol, diesel, and aviation fuel was implemented to incentivise private refiners to sell fuel domestically rather than exporting it to take advantage of higher refining margins.
Earlier, the government of India reduced the windfall tax on petroleum on 31 May, 2024. The tax was cut to INR 5,200 per metric ton from INR 5,700, starting 1 June, 2024. The tax for diesel and aviation turbine fuel, however, remained unchanged.
