In view of the fall in global crude oil prices, the government has reduced the recently imposed tax on the export of petroleum products. The government had imposed unexpected taxes on the export of diesel, petrol, and aviation fuel.
In view of the fall in the prices of crude oil globally, the government has reduced the recently imposed tax (Winfall Tax) on the export of petroleum products. The government had imposed unprecedented taxes on the export of diesel, petrol, and aviation fuel (ATF) three weeks ago. This decision of the government is also going to benefit state-owned oil companies like ONGC, including Reliance Industries (RIL), the largest Indian exporter of petroleum products.
The tax on exports was so much
The government had three weeks ago decided to increase the export duty on petrol, diesel, and aviation fuel in view of the continuous increase in crude oil prices. The government has taken this decision at a time when domestic refinery companies are making huge profits by exporting diesel, petrol, and ATF. The government had raised the tax on gasoline and ATF exports by Rs. 6 per liter. Similarly, the duty on the export of diesel was increased by Rs 13 per liter. Apart from these, the government had said in a separate notification that it has also been decided to impose an additional tax of Rs 23,230 per tonne on domestic crude oil.
Now the tax is so low
According to the latest notification of the government, the windfall tax on diesel and aviation fuel has been reduced by Rs 2 per liter. At the same time, in the case of petrol, windfall tax at the rate of Rs 6 per liter has been completely removed. Besides these, the tax on the export of domestically produced crude oil has now been reduced by about 27 percent to Rs 17,000 per tonne. Bloomberg was the first to report on Thursday last week that the Indian government is considering reducing the windfall tax it recently imposed.
Its effect on the stock market
The federal government had previously declared that petroleum goods will be subject to a windfall tax beginning on July 1. Many countries were levying this type of windfall tax to share in the huge profits being made by the refinery companies. However, since then global crude oil prices have softened. This reduced the profits of crude oil producing and refinery companies. Now such companies will get relief due to reduced tax. As a result, these companies’ shares are currently increasing.
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This company will get maximum profit
Crude oil prices rose to a record high after Russia’s attack on Ukraine in February. However, due to the deepening fears of an economic slowdown around the world, crude oil was affected and its prices started softening from the second week of June. It also limited the profit made by selling domestically produced crude oil to other countries. At the same time, the profits of companies exporting petroleum products prepared in domestic refineries were also affected. According to the data, India’s only private refinery Naira Energy Limited alone contributes 80-85 percent of India’s petrol-diesel exports. Reliance Industries and Rosneft have a stake in this company.
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