Government to receive $12 billion from tax on crude in remaining fiscal year: Moody's

6 Jul 2022 , 10:59 AM

According to Moody’s Investors Service, taxes levied on domestic crude oil and fuel exports will bring in close to $12 billion (roughly Rs94,800 crore) for the government in the remaining months of the current fiscal year, even as it lowered its profit projections for ONGC and Reliance Industries Ltd.

Despite the rupee’s decline, the country still has ample foreign exchange reserves to cover any potential problems with debt service, it said.
The extra income will assist in reducing the negative effects of the decrease in excise duties for gasoline and diesel that was announced in late May to rein in skyrocketing inflation. It stated that “much additional tax revenue will counteract fiscal strain on the sovereign.”

The government implemented a “windfall” tax and a cess on locally produced crude oil on July 1. These taxes applied to the export of gasoline, diesel, and aviation turbine fuel (ATF).

As a result of the announcement, Indian oil companies will be required to pay Rs6 per litre (about $12.2 per barrel) on the export of gasoline and ATF, and Rs13 per litre (roughly $26.3 per barrel) on the export of diesel.