India has increased the windfall tax on petroleum crude oil from Rs 1,300 to Rs 2,300 per tonne. The tax on diesel has been eliminated with the removal of a one-rupee-per-litre windfall tax on aviation fuel.
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The Union government of India has increased the windfall tax on petroleum crude oil from Rs 1,300 to Rs 2,300 per tonne, stated media reports. According to the reports, in contrast, the tax on diesel has been eliminated with the removal of a one-rupee-per-litre windfall tax on aviation fuel.
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This modification follows earlier impositions in July 2022, when a windfall tax was imposed on crude oil producers, extending to petrol, diesel and aviation fuel exports. Rather than selling domestically, private refiners sought global markets to capitalise on high refining margins.
The revision intends to regulate fuel taxes while balancing the interests of numerous stakeholders. The tax changes are projected to have an impact on India's petroleum industry and allied sectors.
Reportedly, windfall tax is levied on domestic crude oil if the rates of the global benchmark rise above USD 75 per barrel. Export of diesel, petrol and aviation fuel attract the levy if product margins--the difference between crude oil and finished petroleum products--go above USD 20 per barrel. The taxes are usually reviewed fortnightly based on average oil prices in the duration.
Reportedly, during the last review on December 18, the windfall tax was sharply cut to Rs 1,300 from the previous Rs 5,000.
Meanwhile, an analysis by news agency ANI showed that in December, Indian markets remained resilient despite varied global cues. In the December period, the India VIX jumped by 19.31 per cent from 12.69 to 15.14. Increased volatility was caused by call writers becoming trapped, clearing the path for bullish momentum.
Reportedly, the Nifty index experienced a robust December marked by bullish activity, reaching an all-time high of 21,801 with a gain of over 1,600 points. Notable buying was observed across sectors, notably in Energy, PSU and Private Banks, Realty, IT, Metal, Auto, and Pharma. This surge facilitated a range breakout spanning the last five months, concluding the calendar year on a strong note.
According to sectorial Relative Rotation Graphs (RRG), the Realty, Energy, and Infra sectors have the most performance potential, while Pharma and Metal have the lowest. The banking and fast-moving consumer goods sectors are showing signs of improvement, the ANI report added.
Leading FMCG corporations are focused on direct rural distribution in the face of rising competition from smaller businesses. Positive news from the automotive sector included rising PVs and two-wheeler wholesales in December, despite Maruti Suzuki reporting a drop in PV sales compared to the previous year, except utility vehicles.
The Nifty's January series opened with a massive 79.5 per cent rollover and a 29.1 per cent increase in Nifty futures open interest. This shows the accumulation of long holdings and proposes a "buy on dips" strategy, which is supported by increased volatility and higher open interest activity.
With ANI inputs
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