Govt’s Tax Shift: Higher Crude Windfall Tax, Lower Diesel and Aviation Fuel Levies
In a recent development, the Government of India has announced adjustments to its tax policies on petroleum products, aiming to balance the impact on consumers and address changes in the global oil market.
An official notification released on Monday outlined key changes, including an increase in the windfall tax on crude oil, a removal of the tax on diesel, and a reduction in the windfall tax on aviation turbine fuel.
The windfall tax on petroleum crude oil has been raised from Rs 1,300 to Rs 2,300 per ton, according to the notification. Simultaneously, the tax on diesel has been entirely eliminated, amounting to a relief of Rs 0.5 per litre for consumers. Additionally, the one rupee per litre windfall tax on aviation turbine fuel has been abolished.
This move comes nearly two years after the Indian government decided to reduce petrol and diesel prices by Rs 8 and Rs 6 per litre, respectively. The latest adjustments signal a strategic response to the ongoing changes in global crude oil prices.
Currently, the international market has experienced a decline in crude oil prices, a factor expected to translate into lower fuel costs in India. Market analysts anticipate a reduction in petrol and diesel prices by Rs 10, as reported in the media.
The Union Finance Ministry is reportedly preparing to implement this reduction in response to the changing dynamics in the global oil market.
International crude oil prices are currently hovering between USD 70 and USD 80 per barrel, providing a backdrop for the proposed cut in fuel prices within the country. Sources indicate that a formal proposal has been submitted to the Prime Minister's Office, advocating for a nationwide reduction in fuel prices to align with the prevailing market conditions.
As the government navigates the complex landscape of energy pricing, these recent adjustments aim to strike a balance between protecting consumer interests and responding to the dynamic global oil market. The decision to cut petrol and diesel prices is poised to bring relief to consumers while fostering economic stability amid changing international oil dynamics.
