India reduces windfall tax on petroleum crude by 32% from today; check details

The Government of India, effective Thursday, May 16, has reduced the windfall tax on petroleum crude from ₹8,400 per tonne to ₹5,700 per tonne, according to a Gazette notification.

The windfall tax remains nil for petrol, diesel, and aviation turbine fuel (ATF).

What is windfall tax and when is it revised?

A windfall tax is a higher tax imposed by the Centre on specific industries when they experience above-average profits. For instance, the Israel-Hamas and Russia-Ukraine wars benefited the oil industry, which saw a sudden increase in its profit. Hence, the government imposed a windfall tax.

The tax was imposed on producers of crude oil and on diesel, gasoline, and ATF exports in July 2022 to regulate private refiners who sell fuel overseas to gain from refining margins.

The windfall tax is adjusted every 14 days. On May 1, the tax on crude petroleum was reduced to ₹8,400 per ton from ₹9,600 per ton.

The windfall tax on petroleum crude was increased twice in April 2024. It rose from ₹4,900 to ₹6,800 per tonne on April 4t and then rose to ₹9,600 per tonne on April 16. In the first half of March, the tax stood at ₹4,600 per tonne, which was raised to ₹4,900 per tonne mid-month.

Shares of Bharat Petroleum climbed 0.7% to ₹630. Hindustan Petroleum Corporation Limited (HPCL) also gained 0.1% to trade at ₹507.3.

Petrol, diesel prices today

Mumbai

• Petrol: ₹104.21 per litre
• Diesel: ₹92.15 per litre

Delhi

• Petrol: ₹94.72 per litre
• Diesel: ₹87.62 per litre

Kolkata

• Petrol: ₹103.94 per litre
• Diesel: ₹90.76 per litre