Jet Fuel Prices Drop as India Cuts Windfall Tax: An Overview

The Indian government recently announced a significant reduction in the windfall gains tax on crude oil and Aviation Turbine Fuel (ATF).

  1. Reduction in Windfall Tax on Crude Oil:
    • The windfall gains tax on crude oil has been reduced from ₹6,300 per tonne to ₹5,000 per tonne.
    • This change follows a previous reduction on November 16, when the tax was lowered from ₹9,800 per tonne to ₹6,300 per tonne, based on the average oil prices in the preceding two weeks.
    • The tax is reviewed every fortnight, reflecting the government’s response to changing market dynamics and global oil prices.
    • The windfall gains tax, known as the Special Additional Excise Duty (SAED), applies to domestically produced crude oil. The SAED on diesel exports was also reduced from ₹4 per litre to ₹2 per litre​​​​​​​​​​.
  2. Reduction in Jet Fuel Prices:
    • Alongside the reduction in the windfall tax, the price of Aviation Turbine Fuel (ATF) in the national capital has been lowered to ₹1,06,155.67 per kilolitre from ₹1,11,344.92 per kilolitre.
    • This 4.6% reduction in ATF price marks the second cut within a month.
    • The government’s decision to lower the levy on jet fuel is seen as a move to respond to the evolving economic conditions and maintain stability in the energy sector​​​​.

These adjustments in taxation and pricing are part of the government’s efforts to balance fiscal considerations with economic stability, especially in the context of evolving energy markets. The move is expected to have notable implications for the energy sector and contribute to India’s overall economic strategy.



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