On Monday, 2nd December, the Government announced that it’s withdrawing the windfall tax levied on Aviation Turbine Fuel (ATF), crude oil, petrol, and diesel products. This was done through a notification introduced in the Lok Sabha.
The Finance Ministry said that the windfall tax, imposed in 2022, will be withdrawn with immediate effect. This comes as a major relief for companies such as ONGC and Reliance Industries, which have been bearing the burden of the tax since its imposition.
The removal of the Special Additional Excise Duty (SAED), also known as the windfall tax, is expected to greatly improve these companies’ profits, especially in refining operations.
The last revision of this tax was on 31 August, when the tax on crude petroleum was set at Rs. 1,850 per tonne.
According to sources, one of the reasons why this tax is being discontinued is because the industry was unhappy and wanted the Government to stop the tax, as average crude prices were also in a comfortable range.
Now, the question remains, how will this withdrawal help the oil refiners and OMCs?