The Indian government, on Tuesday night, announced a reduction in the windfall tax applied to petroleum crude, ATF (aviation turbine fuel), and diesel. The tax on petroleum crude has been lowered from Rs 12,200 per tonne to Rs 9,050 per tonne.
As per the government announcement, the change will be effective from today, October 18. The government will also cut windfall tax on ATF from Rs 3.50/litre to Rs 1/litre, and on diesel from Rs 5/litre to Rs 4/litre.
Last month, the finance ministry increased the windfall tax on domestically produced crude oil to Rs 12,100 per tonne.
Furthermore, the government also announced a reduction in the tax on diesel sales, lowering it from Rs 5.5 per litre to Rs 5 per litre. Additionally, the tax on aviation turbine fuel (ATF) has been decreased from Rs 3.5 per litre to Rs 2.5 per litre. These revised tax rates are scheduled to be implemented on September 30th.
In Maharashtra, the price of petrol has decreased by 50 paise, while diesel has seen a reduction of 46 paise. Uttar Pradesh witnessed a decline of 21 paise in both petrol and diesel prices. Similar price cuts have been applied to petrol and diesel in West Bengal and Rajasthan. However, Jharkhand experienced an increase of 22 paise in both petrol and diesel costs. Meanwhile, petrol prices have risen in Kerala, Goa, and Odisha.
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Presently, in Delhi, petrol is available at Rs 96.72 per liter, and diesel is priced at Rs 89.62 per liter. Mumbai reports petrol prices at Rs 106.31 and diesel at Rs 94.27 per liter, while Kolkata lists petrol at Rs 106.03 and diesel at Rs 92.76 per liter. In Chennai, petrol is being sold for Rs 102.63 per liter, with diesel priced at Rs 94.24 per liter.
Here are revised petrol and diesel prices, as of October 18, 2023 —
| City | Petrol Price (In Rs) | Diesel price (In Rs) |
| New Delhi | 96.72 | 89.62 |
| Bengaluru | 101.94 | 87.89 |
| Noida | 96.79 | 89.96 |
| Mumbai | 106.31 | 94.27 |
| Kolkata | 106.03 | 92.76 |
| Gurugram | 96.84 | 89.72 |
| Chandigarh | 96.20 | 84.26 |
The government initially imposed windfall taxes on domestically produced crude oil sales, effective from July 1, 2022. This decision was prompted by the substantial profits earned by oil exploration and production companies, largely due to the multi-year high crude oil prices following Russia's invasion of Ukraine.
In the international market, oil prices rose on Tuesday, October 17, in anticipation of US President Joe Biden's visit to the Middle East. His visit is expected to involve maintaining support for Israel while working to prevent any further escalation of the conflict with Hamas.
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In the domestic market, crude oil futures with an October 19 expiry on the Multi Commodity Exchange (MCX) were currently trading 0.7 percent lower at Rs 7,188 per barrel. These futures had fluctuated within the range of Rs 7,132 to Rs 7,528 per barrel in the ongoing session, as compared to the previous closing price of Rs 7,239 per barrel.