The government is yet to make any revisions to the Special Additional Excise Duty (SAED), commonly known as the windfall tax, despite a sharp fall in crude oil prices over the last few trading sessions.
Usually, the windfall tax is revised every fortnight and the latest update was expected between March 15-16. However, there has been no update from he government until the filing of this report.
This development of no update on the revision in windfall tax becomes crucial as crude oil prices have corrected sharply over the last two weeks. Prices of both Brent and Nymex Crude are down over 12 percent. Prices in rupee terms have also seen a substantial correction.
A barrel of crude currently costs Rs 5,700, compared to Rs 6,500 at the start of the month. Given this slide, the windfall tax on domestic crude oil, ATF and diesel should have ideally been revised lower. However, lack of updates has left the industry in a state of uncertainty.
In the earlier revision, announced on March 3, the government had raised the windfall tax on crude petroleum to Rs 4,400 from Rs 4,350 per tonne, while for ATF and Diesel, it was cut to Nil and Rs 0.50 per litre, respectively. Petrol continued to have nil special additional excise duty.
This decision was taken after Brent and Nymex had seen a fall of around 2 percent in the period between February 15-28. Windfall tax on crude has been reduced by Rs 500 per tonne, diesel by Rs 5 per litre, and ATF by Rs 1 per litre so far in 2023.
Shares of Oil Marketing Companies have been a beneficiary of the fall in crude oil prices. Shares of Indian Oil, HPCL and BPCL gained in the range of 1-8 percent last week.
(Edited by : Sangam Singh)
