Govt cuts windfall tax on fuel export, domestic crude oil

The government on Wednesday scrapped a three-week-old tax on the export of petrol and cut windfall taxes on overseas shipments of diesel and ATF as well as on domestically produced crude oil after global oil prices fell. While the Rs 6 a litre export duty on petrol was scrapped, the tax on the export of diesel and jet fuel (ATF) was cut by Rs 2 per litre each to Rs 11 and Rs 4 respectively, government notifications showed. The tax on domestically produced crude was also cut to Rs 17,000 per tonne from Rs 23,250, a move that will benefit state-owned Oil and Natural Gas Corporation (ONGC) and Vedanta Ltd. Also, correcting the anomaly that crept in when the windfall taxes were slapped on July 1, the government exempted fuel exports from refineries located in export-focused zones from the levies. The move will benefit Reliance Industries whose exports had become uncompetitive due to the export levies that were as high as USD 26 per barrel. Reliance was up 2.7 per cent to trade at Rs 2,507.15 on the BSE at noon. ONGC stocks also rose 4.63 per cent to Rs 133.35, while Vedanta was up 8.36 per cent at Rs 258.55.