On July 1, the government announced export taxes and imposed restrictions on exports of petrol, diesel and aviation turbine fuel (ATF). Similarly, given the sharp surge in oil prices, the government also levied a special additional excise duty (SAED) on the production of crude oil. Domestic producers were asked to pay a cess of Rs 23,250 per tonne on crude oil as a windfall tax.
The windfall tax is a one-off tax imposed by a government on a company on an unforeseen or unexpectedly large profit, especially unfairly obtained. Domestic producers made windfall gains on high international crude prices, which reached as high as $122 per barrel recently. Now, the crude oil prices have fallen below $100 per barrel.
According to brokerage CLSA, “The last two weeks have seen a massive crash in the refining spreads (or margins) of diesel, gasoline (petrol) and aviation fuel (ATF) coinciding with a cool-off in crude prices from their respective peaks seen in June… This questions the need for the continuation of the windfall tax imposed about two weeks back.”
It added, “A $12 per barrel windfall tax on this takes the realised refining spread down to a near loss-making level of just $2 per barrel. Similarly, the diesel spread after the export tax of $26 per barrel would be a meagre $2 a barrel,” it said.
Read all the Latest News, Breaking News, watch Top Videos and Live TV here.
Comments
0 comment