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The windfall tax on petroleum crude will be reduced to Rs 2,100 per metric ton from Rs 4,600 per ton, according to an official gazette notification. The new rate will be effective from Saturday, August 17, 2024.
A windfall tax is levied by governments when an industry unexpectedly earns large profits, mainly due to an unprecedented event. On Friday, oil prices fell by about two per cent, with Brent crude standing below USD 80 a barrel. Brent crude futures fell by around 2 per cent to close at USD 78.37 per barrel in the international market. The slowing down of the Chinese economy, as widely reported around the world, has affected the crude market. The Chinese economy lost momentum in July when new home prices fell at the fastest pace in nine years, as reported. Traders around the world are worried about the contraction of demand from top oil importers. The Organization of the Petroleum Exporting Countries (OPEC) last week revised the global crude oil demand forecast due to the slow demand from the major oil importer China. The organization expected in its recent assessment that oil demand in 2024 will stand at around 135,000 barrels per day. The windfall tax is typically reviewed every two weeks. The tax, which is revised every fortnight, remains unchanged at zero for diesel, petrol, and aviation turbine fuel. India started the windfall tax on crude oil producers and on exports of gasoline, diesel, and aviation fuel in July 2022 to regulate private refiners who preferred selling fuel overseas instead of locally to gain from firm refining margins. (ANI)
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