The Central Government lowered the tax on crude oil from ₹23,250 per tonne to ₹17,000 per tonne. The decision is influenced by the decline in global crude oil prices.
Considering the windfall gains accumulated by the domestic crude oil producers due to the price rise globally in recent months, the centre has levied a cess of ₹23,250 per tonne on crude oil.
Domestic crude oil producers sell crude oil to domestic refineries at international parity prices.”A windfall tax is a higher tax rate on profits that ensue from a sudden windfall gain to a particular company or industry.”
The government notification has confirmed that the new prices will be effective from today, i.e.Wednesday, July 20.
Apart from this, the recently levied additional excise duty on diesel of ₹13 per litre on exports has been cut to ₹10 per litre. Besides, the export taxes for petrol have been removed . Earlier this month, an export tax of ₹6 per litre was imposed on petrol.
Due to experts becoming financial rewarding, refineries were drying out their pumps.
The government has explained “While crude prices have increased sharply in recent months, the prices of HSD and Petrol have shown a sharper increase. The refiners export these products at globally prevailing prices, which are very high.”