Lok Sabha Question No. 311 (STARRED), answered on 2022-08-08
Subject: Windfall Tax on Crude Oil
Ministry: FINANCE
Asked by: Dayakar Pasunoori, Gaddam Ranjith Reddy

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE *****

## LOK SABHA

## STARRED QUESTION NO. *311

## TO BE ANSWERED ON MONDAY, AUGUST 8, 2022/SRAVANA 17, 1944 (SAKA)

## WINDFALL TAX ON CRUDE OIL

## *311.  SHRI PASUNOORI DAYAKAR: DR. G. RANJITH REDDY:

Will the Minister of Finance be pleased to state:

- (a)  whether  the  Government  has  imposed  windfall  tax  on  domestically  produced crude oil and export tax on petrol, diesel and jet fuel;
- (b) if so, the details thereof;
- (c) the extent up to which Oil and Natural Gas Corporation Limited, Oil India Limited and other Public Sector Oil Marketing Undertakings are likely to  suffer  due  to  the said tax;
- (d)  whether  there  is  any  proposal  to  review  the  proposed  windfall  tax  at  fixed intervals and if so, the details thereof; and
- (e)  whether  the  Government  is  going  to  share  this  with  the  States  and  if  not,  the reasons therefor?

## ANSWER

## MINISTER OF FINANCE SHRIMATI NIRMALA SITHARAMAN

- (a) to (e): A statement is placed on the Table of the House .

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## STATEMENT REFERRED TO IN REPLY TO THE LOK SABHA STARRED QUESTION NO. 311 RAISED BY SHRI PASUNOORI DAYAKAR AND DR. G. RANJITH REDDY FOR 8 th  AUGUST, 2022 ON WINDFALL TAX ON CRUDE OIL

(a) and (b): The Central Government, has with effect from the 1 st July, 2022 imposed the duties/cesses on domestically produced Crude Petroleum and export of Petrol, Diesel and Aviation Turbine Fuel. The detail of these duties/cesses is as under:

| Item                                  | Duty/cess w.e.f 01.07.2022   | Duty/cess w.e.f 20.07.2022   | Duty/Cess w.e.f 03.08.2022   |
|---------------------------------------|------------------------------|------------------------------|------------------------------|
| Petroleum Crude (domestic production) | Rs 23,500 per ton            | Rs 17,000 per ton            | Rs 17,750 per ton            |
| Petrol (exports)                      | Rs 6 per litre               | Nil                          | Nil                          |
| Diesel (exports)                      | Rs 13 per litre              | Rs 11 per litre              | Rs 5 per litre               |
| Aviation turbine Fuel (exports)       | Rs 6 per litre               | Rs. 4 per litre              | Nil                          |

(c)  and (d): The domestic producers of petroleum crude like ONGC sell their crude at international parity price. As  international crude  prices rose sharply, these  crude producers were making super normal profits. The prices of diesel, petrol, and ATF rose even more sharply, which led to extraordinary cracking margins (difference between the product  price  and  the  crude  price)  on  exports  of  these  products.  The  cess/duties  were imposed  in  this  background.  These  are  being  reviewed  periodically,  as  detailed  above taking into account all relevant factors including international prices.

(e): While the cesses are not devolved to the States, the various Cesses collected by the Central Government are primarily used for funding various Centrally Sponsored schemes, whereby funds are transferred to the States for implementing these schemes and thus are used for development expenditure by the States.

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