Windfall Tax: Oil and gas companies get relief from windfall tax, new law will not impose unexpected tax benefits

New Delhi| After the implementation of the new law, oil and gas companies will not have to face any new taxes like windfall tax. Petroleum Minister Hardeep Singh Puri said, after the passage of the new bill, it will become difficult to impose such a tax, because someone or the other will sue us. He said investors looking to invest in oil and gas exploration and production want fiscal stability. New taxes, which attempt to strip profits earned at higher prices, without compensating for lower or zero margins when rates are lower, are often a deterrent.

A windfall profit tax was imposed in 2022
India imposed windfall profits tax on July 1, 2022, and joined the list of countries that tax extraordinary profits of energy companies. Tax rates were reviewed every fortnight based on average oil prices in the last two weeks. In December last year, this tax was abolished after 30 months. Puri said that global oil companies are exploring the possibility of investing in India. Brazil’s Petrobras is in talks with Oil India to explore the Andaman Basin.

ONGC is in talks with big companies
Also Oil and Natural Gas Corporation (ONGC) is in talks with big companies like ExxonMobil and Equinor for cooperation in deep water exploration. The new law is creating conditions for all of them (international oil companies) to come and see India. The bill is part of the government’s reform agenda, which will make it easier to find and produce crude oil and natural gas.