The Indian government is set to review the windfall tax on crude oil after recently reducing the tax to nil, as reported by Bloomberg News. Tarun Kapoor, advisor to the Prime Minister, confirmed that the oil ministry has requested the removal of the windfall tax on crude oil output during a press briefing at the World Biogas Associations' India Conference in New Delhi.

Previously, the windfall tax was set at ₹1,850 per tonne as of September 17, but it was eliminated effective September 18. The windfall tax, introduced in 2022, aimed to address the unexpectedly high profits generated by oil companies due to soaring global crude prices, which were largely driven by external factors rather than internal improvements or innovations.

The tax rates are assessed biweekly, reflecting the average oil prices from the preceding two weeks. Recently, crude oil prices have shown mixed trends, particularly as the US indicated a rise in nationwide crude inventories. Additionally, tensions in West Asia are intensifying, with traders anticipating potential retaliatory actions from Israel against Iran following a missile strike earlier this month.

As of 6:00 a.m. IST, Brent crude was trading 0.41% lower at $75.73 per barrel, while West Texas Intermediate rose by 2.17% to $72.09. The volatility of crude oil prices throughout October has been significant, with ongoing regional tensions raising concerns about possible supply disruptions in a key area that accounts for roughly a third of global output.