Govt cuts windfall tax on domestically produced crude oil, jet fuel

The government has cut windfall tax on domestically produced crude oil to Rs 1,900 per tonne from Rs 2,100 per tonne, according to an order.

Windfall tax on export of diesel and jet fuel has also been reduced, the order, dated January 16, said. The tax on export of diesel has been brought down to Rs 5 per litre, from Rs 6.5 per litre, while on jet fuel, it has been brought down to Rs 3.5 a litre from Rs 4.5 a litre.

The new price regime has come into effect from Tuesday.

Crude oil pumped out of the ground and from below the seabed is refined and converted into fuels like petrol, diesel and jet fuel.

Windfall profit tax on domestically-produced crude oil is the second lowest since the new levy was introduced in July 2022. The tax had fallen to Rs 1,700 per tonne in the second fortnight of December 2022.

The tax rate is reviewed on a fortnightly basis.