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Windfall profit tax on crude oil hiked to Rs 10,200 per tonne, levy on export of diesel cut.

The tax on crude oil produced by firms such as state-owned Oil and Natural Gas Corporation (ONGC) was hiked to Rs 10,200 per tonne, from Rs 9,500 per tonne, with effect from November 17, a government it is said.

The government on Wednesday hiked the windfall tax on domestically produced crude oil while reducing the rate on the export of diesel.

 The tax on crude oil produced by firms such as state-owned Oil and Natural Gas Corporation (ONGC) was hiked to Rs 10,200 per tonne, from Rs 9,500 per tonne, with effect from November 17, a government it is said.

In the fortnightly revision of the windfall tax, the government cut the rate on the export of diesel to Rs 10.5 per liter from Rs 13 per liter. The levy on diesel includes Rs 1.50 per liter road infrastructure cess.

The export tax on jet fuel or ATF, set at Rs 5 a liter in the last review on November 1, has remained the same.

When the levy was first introduced, a windfall tax on the export of petrol alongside diesel and ATF too was levied. But the gasoline tax was scrapped in subsequent fortnightly reviews.

While the windfall profit tax is calculated by taking away any price producers are getting above a threshold, the levy on fuel exports is based on cracks or margins that refiners earn on overseas shipments. These margins primarily differ between the international oil price realized and the cost.

India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super average profits of energy companies. At that time, export duties of Rs 6 per liter ($ 12 per barrel) were levied on petrol, aviation turbine fuel, and Rs 13 a liter ($ 26 a barrel) on diesel. A Rs 23,250 per tonne ($ 40 per barrel) windfall profit tax on domestic crude production was also levied.