Govt Hikes Windfall Tax on Crude Oil; ONGC & OIL to Take Hit

The Government has hiked the windfall tax on crude oil to Rs 9,600 per metric ton with effect from Tuesday from Rs 6,800 earlier, as part of its fortnightly revision.

Upstream oil exploration and production companies ONGC and Oil India Ltd stand may lose as they will not get the full benefit of rising international prices for their crude. However, the government on the other hand will get more resources to finance its social welfare schemes for the poor and keep its fiscal deficit in check.

The government had first imposed the windfall tax on crude oil in July last year and extended the levy on exports of gasoline, diesel and aviation fuel after private refiners started making gains from robust refining margins in overseas markets, instead of selling in the domestic market.