In a significant development aimed at addressing the concerns of skyrocketing petrol and diesel prices, the central government has taken a major step regarding crude oil taxation.
The government has now reduced the tax on domestically produced crude oil to zero, bringing relief to consumers.
This decision also extends the zero tax rate to diesel and aviation fuel exports, as announced in a recent government order.
Effective from today, the government has lowered the Special Additional Excise Duty (SAED) on crude oil produced by companies such as Oil and Natural Gas Corporation (ONGC) to Rs 4,100 per tonne, according to an official order issued on Monday.
This reduction marks the second time that the windfall gains tax on domestically produced oil has been lowered to zero. The tax was initially abolished in July of the previous year.
Although it was temporarily reintroduced in early April, with rates set at Rs 6,400 per tonne for the latter half of the month, it has now been eliminated again.
Furthermore, the government has also maintained the zero tax rate on diesel exports since April 4 and on aviation turbine fuel (ATF) exports since March 4.
The recent decline in international crude oil prices, reaching around $75 per barrel, has influenced the decision to cut the windfall profit tax.
In a related decision last month, the central government reduced the windfall tax on crude oil by Rs 3,500 per tonne.
Consequently, the tax on domestically produced crude oil in the country has been reduced to zero.
Notably, the government had previously increased the export duty on diesel from Rs 0.50 per liter to Rs 1 per liter. The implementation of the crude oil tax reduction will commence from Tuesday.
With these bold measures, the government aims to alleviate inflationary pressure on fuel prices, providing potential relief to consumers and easing their financial burden.
It remains to be seen how these changes will impact the retail prices of petrol and diesel in the coming days.
