India reimposes windfall tax on petroleum crude after two months - Economic Times

The Indian government has reimposed a windfall tax on domestic petroleum crude, effective July 15, according to a government notification. The Special Additional Excise Duty (SAED) on crude petroleum is raised to Rs 1600/per metric tonne, from nil. The changes will take place from Saturday, the country's Ministry of Finance said in a notification, adding that the government has left the windfall tax on diesel, petrol and aviation turbine fuel unchanged at zero. India had cut the windfall tax on petroleum crude to zero from Rs 4,100 per tonne, in May.

India last July had imposed the windfall tax on crude oil producers and extended the levy on exports of gasoline, diesel and ATF, joining a growing number of nations that tax super normal profits of energy companies. While duties were slapped on the export of petrol, diesel and jet fuel (ATF), a Special Additional Excise Duty (SAED) was levied on locally produced crude oil.

Today's revision comes on the back of rising oil prices. The tax rates are reviewed every fortnight based on the average oil prices in the previous two weeks.
Windfall profit tax is calculated by taking away any price that producers are getting above a threshold.

Global oil prices in recent days have risen to their highest in nearly three months after U.S. inflation data suggested interest rates in the world's biggest economy were close to their peak. International brent crude futures were trading above $80 per barrel. Data on Wednesday showed U.S. consumer prices rose modestly in June and registered their smallest annual increase in more than two years as inflation continued to subside.

The data caused the U.S. dollar index to drop to the lowest since April 2022, which helped to boost oil prices. A weaker dollar makes crude cheaper for holders of other currencies.The oil price rise has also been supported by supply disruptions in Libya and Nigeria. Oil prices have rallied by over 11% in two weeks, primarily in response to supply cuts from top producers Saudi Arabia and Russia. A report by the International Energy Agency (IEA) on Thursday predicted oil demand would hit a record high this year, though broader economic headwinds and interest rate hikes meant the increase would be slightly less than previously anticipated.

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India reimposes windfall tax on petroleum crude after two months - Economic Times
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