The Centre has tried to head off an avalanche of criticism over its windfall tax on crude oil refiners, which was announced last week, by holding out the possibility of a rollback.

The trouble was that it linked the reversal of its sudden executive decision to a near impossible conditionality in the current scenario: that crude oil prices would tumble by $40 a barrel from current levels.

The Modi government has already faced flak for trying to beef up its parlous treasury by scooping out profits from crude oil refiners through the windfall tax.

Revenue secretary Tarun Bajaj then spooked the petroleum industry and markets by talking about a fortnightly review of global crude prices — which seemed to suggest that the one-off tax might actually gouge more out of the state-owned refiners than originally intended.

The benchmark Brent crude hovered around $70 a barrel in early December last year. On Monday, it had nudged up to $113.50 a barrel.

Industry experts contend that the crude oil prices will rise — and not fall in the near future — as the Group of Seven nations ratchets up pressure on Russia with more economic sanctions that include a possible price cap on the crude that it sells to countries such as China and India.

The Russians have already threatened retaliatory action by choking off all supplies of crude and petroleum products to the West.

The upshot of such an eventuality is that crude oil prices will continue to boil — and any talk of a slide to levels seen last December is just a pipedream.

Analysts expect the windfall tax to result in additional revenue worth Rs 1.2 lakh crore, which will more than compensate for the Rs 1 lakh crore loss expected from the cut in excise duties on petrol and diesel that were announced in May.

Former ONGC chairman R.S. Sharma told The Telegraph: “The oil prices coming down in the near-to-medium term looks unlikely given the global situation. The review gives the impression that the government could revise the tax upwards, which brings uncertainty for E&P firms.”

The issues

■ The moot point is whether the windfall tax will stay or not

■ The tax may go if crude price falls by $40, which is unlikely

■ There is a possibility of a review on a fortnightly basis, which means if crude price rises, windfall tax may go up