India Abolishes Windfall Tax on Crude Oil, Petrol, Diesel, and ATF Exports
In a significant move aimed at boosting the domestic energy sector and refining margins, the Indian government has abolished the windfall tax on the export of crude oil, petrol, diesel, and aviation turbine fuel (ATF). Effective December 2, 2024, this policy shift marks the end of the Special Additional Excise Duty (SAED) introduced in 2022 amidst soaring global crude prices due to the Russia-Ukraine conflict
Background of the Windfall Tax
The windfall tax was implemented in July 2022 to capture the extraordinary profits earned by oil producers and exporters during a period of heightened global oil prices. At its peak, the tax contributed ₹25,000 crore to government revenues in FY23. However, as crude prices stabilized around $70–75 per barrel, revenue collection from the tax plummeted to an estimated ₹6,000 crore for FY25, prompting the government to reconsider its efficacy.
