India Reduces Windfall Tax on Fuel Exports Amid Global Tensions

In a recent announcement, India has substantially cut the windfall tax on the export of fuels. The government lowered the tax on petrol exports by half to Rs 1.5 per litre and reduced levies on diesel and aviation turbine fuel to Rs 13.5 and Rs 9.5 per litre, respectively. These changes took effect from June 1.

The finance ministry's directive also removes road and infrastructure cess on fuel exports, though domestic consumption rates remain unchanged. This move aims to ensure the availability of these fuels domestically, given the global oil price surge due to geopolitical developments in West Asia, including the US-Israel and Iran conflict.

Following the escalation of these tensions, crude oil prices have significantly risen, prompting the Indian government to adjust its export duties to prevent exporters from capitalizing excessively on international price disparities.

(With inputs from agencies.)