Effective sunday, the government cut the windfall tax on domestically-produced crude oil to Rs 8,000 per tonne from Rs 10,500, and halved the levy on export of diesel to Rs 5 per litre. It also scraped a levy of Rs 5 per litre on export of jet fuel, at the sixth fortnightly review of the one-off taxes on oil companies. The taxes were introduced on July 1, as the Centre felt that elevated crude prices were allowing oil companies to make windfall profits, and that the exchequer must get a share of such gains. The reduction in tax rates follows the easing of crude oil prices in international markets. In the previous review a fortnight ago, the Centre had slashed the windfall tax on domestic crude by 21 per cent and cut the special levies on export of diesel and ATF by 37 per cent and 44 per cent, respectively, citing a moderation of refining margins. While private refiners Reliance Industries and Rosneft-based Nayara Energy are the principal exporters of diesel and ATF, the windfall levy on domestic crude targets producers like state-owned ONGC and Vedanta-controlled Cairn. The benchmark Singapore’s gross refining margin (GRM) was trading in the range of $8-12 per barrel since August. Diesel cracks have been in the range of $25-50 per barrel and ATF cracks were around $25-50 per barrel.
