The Ministry of Finance announced on Monday, December 02, 2024, the removal of the windfall tax, also known as the Special Additional Excise Duty (SAED), on key petroleum products, including aviation turbine fuel (ATF), crude oil, petrol, and diesel. The rollback of the windfall tax came after a review conducted by several government bodies, including the Prime Minister’s Office (PMO), the Revenue Department, and the Ministry of Petroleum.
Introduced in July 2022, the windfall tax aimed to target unexpected profits derived from domestic crude oil production. The tax is applied to the production of petroleum crude and the export of petroleum products like ATF, petrol, and diesel.
In addition to the scrapping of the windfall tax, the government also announced the withdrawal of the Road and Infrastructure Cess (RIC) on the export of petrol and diesel. This decision further supports the government’s intent to ease tax burdens on the oil sector.
The abolition of the windfall tax is expected to have a positive impact on major oil producers and refiners, including Reliance Industries and ONGC. The removal could potentially enhance refining margins for these companies. Following the announcement, the stock prices of Reliance Industries and ONGC saw an increase for the 2nd session in a row. Reliance Industries shares opened at ₹1,318.85 and touched the day high of ₹1,326.70, reflecting a gain of over 1% on December 3, 2024, while ONGC shares gained over 2%, reaching a day high of ₹258.85.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
Published on: Dec 3, 2024, 11:51 AM IST
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