The government has reduced the windfall tax on the production of crude oil from 3,500 rupees ($42.56) per tonne to nothing. Diesel's windfall tax has been reduced from Rs 1 per litre to Rs 0.5 per litre. Petroleum and ATF are not subject to any
windfall taxes. Governments impose windfall taxes when an industry unexpectedly makes substantial profits. The levy was imposed in July of last year when oil companies saw their earnings jump as a result of high energy prices.
Windfall taxes for crude oil have decreased, imitating Brent Crude Oil prices, from Rs 23,250 per tonne in July 2022 to Rs 3,500 per tonne as of 21 March 2023. The choice was made at the same time as OPEC+ chose to reduce production. The action caused Brent to increase by over 6% to USD 84.58 per barrel.
This surge will counteract the rate lowering seen in the crude oil import basket for India. During the majority of the second part of last month, the Indian basket traded around the USD 73–74 per barrel region, which improved the chances of a decrease in the price of gasoline and diesel.
