The central has slashed the windfall tax on crude oil from Rs 11,000 to Rs 9,500 per tonne. This change will be applied from November 2 according to an official notification released by the Ministry of Finance.
The windfall tax has been reduced by almost 13%.
However, the windfall tax on the export of aviation turbine fuel (ATF) has been hiked from Rs 3.50 per litre to Rs 5.
The special additional excise duty on the export of diesel has also been increased from Rs 12 a litre to Rs 13 a litre.
The windfall tax is charged as special additional excise duty to contain the unexpectedly large profits earned by domestic crude oil producers. It is revised by the central government every fortnight.
The government has reduced the windfall tax on the sale of locally produced crude oil when global oil prices on rose by more than 2% on Tuesday. On Wednesday, Brent crude price went up to $95.71 per barrel on the Intercontinental Exchange, which is up 1.12% from the previous close.
As exports are becoming highly remunerative, it has been seen that certain refiners are drying out their pumps in the domestic market, an official statement had earlier said while imposing windfall tax.
The government initially introduced the windfall tax on July 1.
The government then said it will have no implication on domestic retail prices of diesel and petrol and will ensure domestic availability of petroleum products.
For the record, taking into account windfall gains being accumulated by the domestic crude producers due to rising global crude prices in recent months, the Centre had initially imposed a cess of Rs 23,250 per tonne on crude oil.
(with inputs from Agencies)