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The ministry, in its latest notification on August 2, had increased the exceptional tax on domestically produced crude oil to ₹17,750 per ton from ₹17,000 per ton previously. The diesel export tax was reduced to ₹5 per liter from ₹11 per liter previously, and the ATF export tax, which was ₹5 per liter previously, was removed.

The government had given a breather to oil producers and refiners in its first review on July 20, 2022. The export tax of ₹6 rupees per liter of gasoline was scrapped, while the one-off tax on export of diesel and ATF, at that time. , was reduced by ₹2 per litre. The levy on the export of domestically produced crude oil has been reduced to ₹17,000 per ton from ₹23,250.

The Center first introduced a tax of ₹23,250 per ton by way of Special Additional Excise Duty (SAED) on domestically produced crude oil on July 1, 2022. The import of crude oil n was not subject to this tax.

The Centre’s reasons for introducing a windfall tax on oil exports were simple: the government wanted to exploit the huge profits that oil producers and refiners were making from oil exports. Crude prices have risen sharply in recent months and domestic crude producers are selling crude to domestic refineries at international parity prices. As a result, domestic crude producers were making windfall gains. Altogether, these measures were meant to offset the fuel excise duty cut announced in May 2022.

Finance Minister Nirmala Sitharaman, in a response to the Lok Sabha on August 8, 2022, had said that international prices for crude, diesel, gasoline and ATF had risen sharply recently, and crude producers achieved “extraordinary” and therefore “super normal” crack margins. profits”.

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