ONGC, Oil India Ltd to benefit as Govt cuts windfall tax on crude oil

New Delhi: The government on Thursday reduced windfall tax on crude oil to Rs 6,300 per tonne from Rs 9,800 in its fortnightly review which will benefit upstream oil companies including ONGC and Oil India Ltd.

In the last fortnightly review on October 31, the government had hiked the windfall tax on crude to Rs 9,800 per tonne from Rs 9,050 with effect from November 1 as oil prices had risen.

The increase in windfall tax helps the government to raise more funds to finance the subsidy on LPG and CNG while keeping the fiscal deficit in control.

However, companies like ONGC and Oil India lose out as they cannot get the full benefit of rising international prices for their crude.

The special additional excise duty on diesel was also halved to Re 1 from Rs 2 per litre, according to the notification.

The government first imposed the windfall tax on crude oil in July last year and extended the levy on exports of gasoline, diesel and aviation fuel after private refiners started making gains from robust refining margins in overseas markets, instead of selling at home.