In a significant move, the Indian government has abolished the windfall tax on petrol, diesel, and aviation turbine fuel (ATF) exports, effective Monday, December 2, 2024. This decision follows extensive deliberations by the Prime Minister’s Office (PMO), the Revenue Department, and the Petroleum Ministry. Along with this, the government also withdrew the Road and Infrastructure Cess (RIC) on petrol and diesel exports, providing immediate relief to oil giants such as Reliance and ONGC.
The windfall tax, introduced in July 2022, aimed to capture a portion of the massive profits oil companies made from surging global crude prices, a result of the Russia-Ukraine war and Western sanctions on Russia. While the tax was intended to generate additional government revenue, it faced criticism from industry players who argued it hurt their profitability and discouraged domestic production.
The tax had been a part of a broader global trend, with several countries imposing similar measures to capitalize on the unexpected windfall gains in the oil sector. However, as global oil prices began to stabilize, the tax became less effective, and its removal is expected to help boost the refining margins of Indian oil companies. The government had previously signaled plans to reduce the windfall tax in September, when it was reduced from ₹1,850 per tonne.
With the tax now scrapped, the oil industry anticipates improved profitability and a more favorable business environment moving forward.
 exports, effective Monday, December 2, 2024. This decision follows extensive deliberations by the Prime Minister's Office (PMO), the Revenue Department, and the Petroleum Ministry. Along with this, the government also withdrew the Road and Infrastructure Cess (RIC) on petrol and diesel exports, providing immediate relief to oil giants such as Reliance and ONGC.){kind=link}