India likely to cut windfall gain tax levy further in fortnightly review

With international crude oil prices cooling off a bit, people in the know at North Block have told CNBC-TV18 that India is likely to cut the export duty on diesel and the windfall tax on petroleum crude further in the upcoming fortnightly review.

Earlier this month, the government revised the rates downwards in its second review after levying these taxes on July 1.

The windfall tax on crude oil now stands at Rs 17,000 per tonne from the earlier Rs 17,750 per tonne. The export duty on diesel was also cut from Rs 11 per litre to Rs 5 per litre in the second review. The export duty on ATF was entirely scrapped and the export duty on petrol continues to be nil.

At the time of imposing the windfall tax, the government had stated that the objective behind the move was to shore up domestic supplies as refiners were preferring to export than meet the local requirements.

Earlier this week, Barclays lowered its Brent price forecasts by $8 per barrel for 2022 and 2023, as it expects a large surplus of crude oil over the near-term due to "resilient" Russian supplies.

U.S. crude stocks fell by 7.1 million barrels in the week to 425 million barrels, Energy Information Administration (EIA) data showed, compared with analysts' forecasts for a 275,000-barrel drop in a Reuters poll.