With effect from May 16, India decreased the windfall tax on petroleum crude from Rs 4,100 per tonne to nil. The windfall tax on petrol, diesel and aviation turbine fuel (ATF) remained zero. In early May, the government decreased the windfall tax on domestically produced crude oil from $6,400 per tonne to $4,100 per tonne.

Prior to that, the government reduced the export tariff on diesel and increased the windfall profit tax on.

The price of locally produced oil ranges from $0 to $6,400 per tonne. The tax rates are modified every two weeks based on the two-week average of oil prices. On July 1, 2022, India enacted the windfall profit tax, joining an increasing number of countries that tax higher-than-average gains in the energy sector. While taxes were levied on the export of petrol, diesel and jet fuel (ATF), the production of crude oil in the country was subject to a Special Additional Excise Duty (SAED). Then, New Delhi imposed export duties of Rs. 6 per gallon on petrol and ATF, and Rs. 13 per litre on diesel.

The windfall profit tax is calculated by subtracting any price received by producers that exceeds the threshold. The fee was intended to alleviate customers by compensating for the decrease in excise duty on gas and diesel. However, the government's revenue is expected to shrink when the windfall cess declines from its early levels.

Nayara Energy, a subsidiary of Rosneft, and private refiner Reliance Industries Ltd are the two largest exporters of fuels, including diesel and ATF. The windfall charge on domestic crude is aimed at producers such as the government-run Oil and Natural Gas Corporation (ONGC) and Vedanta Ltd.