The government has raised the windfall tax on profits from domestically produced crude oil, while cutting the levy on exports of diesel to zero.

The levy on crude oil produced by companies such as Oil and Natural Gas Corporation Ltd has been increased from nil to Rs 6,400 per tonne, according to the finance ministry.

The government reduced the tax on exports of diesel to zero from 50 paise per litre, the statement said.

The tax on overseas shipments of aviation turbine fuel stays at zero. The new tax rates will take effect on April 19, it said.

At the last revision on April 4, the windfall tax on domestically produced crude oil was cut to nil as international oil prices dipped below $75 per barrel.

However, oil prices have shot up this month following a surprise cut in production announced by the producers' cartel Opec and its allies like Russia.

Official data showed that the Indian basket of crude, which represents prices of Oman and Dubai for sour grades and Brent for sweet grade and averaged at $78.5 in March, has since gone up to $85.64 a barrel so far in April. The basket was at $86.09 a barrel on Monday, according to Petroleum Planning and Analysis Cell.

Prashant Vasisht, vice-president and co-group head — corporate ratings, Icra Ltd, said: "There was a moderation in crude oil prices in March 2023; hence, the special additional excise duty (SAED) was reduced to nil on April 04, 2023."

"However, the crude oil prices jumped by 9 per cent to around $85 per barrel post OPEC+ announcement of additional production cuts of 1.16 million barrels per day on April 02, 2023."