The higher windfall tax on diesel and the surprising decision to re-introduce the levy on aviation turbine fuel will reduce the gross refining margin (GRM) of refiners to the extent of about $1.5 per barrel, analysts said.
While the cut in the profit tax on domestic crude production was along expected lines — because of the fall in global crude price and its corresponding reflection on the Indian basket — the hike on diesel and ATF surprised the analysts.
At the third fortnightly review on Thursday, the government increased the windfall profit tax on the export of diesel to Rs 7 per litre from Rs 5 a litre and brought a Rs 2-a-litre tax on ATF exports.
