Primary Country (Mandatory)

United States

Other Country (Optional)

Set News Language for United States

Primary Language (Mandatory)
English
Other Language[s] (Optional)
No other language available

Set News Language for World

Primary Language (Mandatory)
English
Other Language(s) (Optional)

Set News Source for United States

Primary Source (Mandatory)
CNN
Other Source[s] (Optional)

Set News Source for World

Primary Source (Mandatory)
AajTak
Other Source(s) (Optional)
  • Countries
    • India
    • United States
    • Qatar
    • Germany
    • China
    • Canada
    • World
  • Categories
    • National
    • International
    • Business
    • Entertainment
    • Sports
    • Special
    • All Categories
  • Available Languages for United States
    • English
  • All Languages
    • English
    • Hindi
    • Arabic
    • German
    • Chinese
    • French
  • Sources
    • India
      • AajTak
      • NDTV India
      • The Hindu
      • India Today
      • Zee News
      • NDTV
      • BBC
      • The Wire
      • News18
      • News 24
      • The Quint
      • ABP News
      • Zee News
      • News 24
    • United States
      • CNN
      • Fox News
      • Al Jazeera
      • CBSN
      • NY Post
      • Voice of America
      • The New York Times
      • HuffPost
      • ABC News
      • Newsy
    • Qatar
      • Al Jazeera
      • Al Arab
      • The Peninsula
      • Gulf Times
      • Al Sharq
      • Qatar Tribune
      • Al Raya
      • Lusail
    • Germany
      • DW
      • ZDF
      • ProSieben
      • RTL
      • n-tv
      • Die Welt
      • Süddeutsche Zeitung
      • Frankfurter Rundschau
    • China
      • China Daily
      • BBC
      • The New York Times
      • Voice of America
      • Beijing Daily
      • The Epoch Times
      • Ta Kung Pao
      • Xinmin Evening News
    • Canada
      • CBC
      • Radio-Canada
      • CTV
      • TVA Nouvelles
      • Le Journal de Montréal
      • Global News
      • BNN Bloomberg
      • Métro
MoreBack to News Headlines
Explained | What is windfall tax and why are countries imposing it on the energy sector right now?

Explained | What is windfall tax and why are countries imposing it on the energy sector right now?

The Hindu
Sunday, September 11, 2022 8:59 AM GMT

Big energy companies clocked huge profits in the first half of this year, making record windfall gains which governments have tried to rein in  

The story so far: Finance Minister Nirmala Sitharaman on Monday, September 2, defended the windfall tax imposed by the Centre on domestic crude oil producers, saying that it was not an ad hoc move but was done after full consultation with the industry.

The Central government on July 1, introduced a windfall profit tax of ₹23,250 per tonne on domestic crude oil production, which was subsequently revised fortnightly four times so far. The latest revision was on August 31, when it was hiked to ₹13,300 per tonne from ₹13,000. Ms. Sithraman explained the introduction of the windfall tax as a way to rein in the “phenomenal profits” made by some oil refiners who chose to export fuel to reap the benefits of skyrocketing global prices while affecting domestic supplies.

Besides India, a wave of countries including the United Kingdom, Italy, and Germany have either already imposed a windfall profit tax on super normal profits of energy companies or are contemplating doing so.

Windfall taxes are designed to tax the profits a company derives from an external, sometimes unprecedented event— for instance, the energy price-rise as a result of the Russia-Ukraine conflict.

These are profits that cannot be attributed to something the firm actively did, like an investment strategy or an expansion of business. The United States Congressional Research Service (CRS) defines a windfall as an “unearned, unanticipated gain in income through no additional effort or expense”.

Governments typically levy a one-off tax retrospectively over and above the normal rates of tax on such profits, called windfall tax. One area where such taxes have routinely been discussed is oil markets, where price fluctuation leads to volatile or erratic profits for the industry.

There have been varying rationales for governments worldwide to introduce windfall taxes, from redistribution of unexpected gains when high prices benefit producers at the expense of consumers, to funding social welfare schemes, and as a supplementary revenue stream for the government.

Read full story on The Hindu
Share this story on:-
Run 3 Space | Play Space Running GamePlay Run 3, the ultimate space tunnel running game with 300+ challenging levels!Adv.
Traffic Jam 3D | Online Racing GameTraffic Jam 3D is a game where you’ll be driving through heavy traffic.Adv.
Duck Hunt | Play Old Classic GamePlay the classic 1984 light gun shooter game Duck Hunt on your browser.Adv.
More Related News
Iran says it ‘confronted, warned’ a U.S. destroyer in the Gulf of Oman

Iranian forces confront U.S. destroyer in Gulf of Oman, warning it to stay out of Tehran's waters.

U.N. body says Israeli forces killed over 1,000 aid-seekers in Gaza since May, as hunger worsens

Desperation in Gaza due to famine risk, looting, and violence; Israel accused of blocking aid, causing starvation and chaos.

Thailand recalls ambassador to Cambodia amid border tensions

Thailand recalls ambassador to Cambodia and plans to expel Cambodian ambassador after landmine incident along disputed border.

Russia-Ukraine talks to begin in Istanbul: Turkish source

Turkish, Russian, and Ukrainian delegations to meet in Istanbul for talks on Wednesday, led by Foreign Minister Hakan Fidan.

Nepal PM Oli's party rejects former president's bid to rejoin party politics

CPN-UML amends statute to allow PM Oli to continue as chairman, blocks Bhandari's return to active politics.

Bangladesh jet crash: Teacher dies saving students from inferno

English teacher Maherin Chowdhury sacrificed her life to save students from a burning school after a military jet crash.

Daily Quiz | On events happened on July 23 Premium

Here is a quiz on various events that happened on July 23

U.S. House ending session early as Republicans clash over Epstein vote

U.S. House Speaker Mike Johnson resists pressure to act on Epstein investigation, sending members home early amid GOP turmoil.

WHO sounds alarm on risk of chikungunya epidemic

WHO warns of global chikungunya virus epidemic, urging urgent action to prevent deadly outbreak spread by mosquitoes.

China says U.S. withdrawal from UNESCO not behaviour of 'responsible country'

China expresses regret over US withdrawal from UNESCO, emphasizing support for the agency's cultural and educational efforts.

Will decide on resignation over election loss after studying U.S. tariff deal: Japan’s Shigeru Ishiba

Japanese PM Ishiba faces resignation decision after election defeat and tariff deal with U.S., sparking political instability in Japan.

Trump envoy Witkoff to travel to Europe and discuss Gaza, U.S. official says

US envoy Witkoff to push for Gaza ceasefire in Italy, Axios reports, amid mounting humanitarian crisis from Israel's assault.

Investigation into South Korea's Jeju Air crash hints at pilot error, angering families

Initial investigation results of the Jeju Air crash in South Korea suggest pilots turned off a less-damaged engine before landing.

Parking Slot | Free Parking GamePlay Parking Slot, the best online 3D car driving and parking game.Adv.
Slope Ball Run - Play OnlineSlope Game takes you on an exciting journey of a ball on special paths.Adv.
Trump offers support to Musk’s car company in surprising post as Tesla stock plunges

Trump supports Musk's Tesla despite feud, Musk warns of rough quarters ahead due to financial struggles and political tensions.

Thailand launches airstrikes on Cambodia as border clashes leave at least 14 dead

Thai-Cambodian border clashes escalate, leaving 14 dead, civilians displaced, and both sides blaming each other for the violence.

‘Civil society globally did a fantastic job in supporting Gaza; but governments in West are evil’  Premium

Palestinian human rights lawyer Raji Sourani discusses efforts to prosecute Israel for "genocide" in Gaza in exclusive interview.

Russian attacks kill five, including family, in east Ukraine

Russia intensifies attacks in Ukraine, killing civilians and displacing families, as ceasefire talks continue amid escalating conflict.

Brazil to join South Africa's Gaza genocide case against Israel at ICJ

South Africa, Brazil, and other countries seek ICJ case against Israel for alleged genocide in Gaza.

Israel recalls Gaza negotiators after Hamas responds to ceasefire plan

International mediators struggle to broker a ceasefire between Israel and Hamas in Qatar amid dire humanitarian crisis in Gaza.

Hulk Hogan, who helped turn pro wrestling into billion-dollar spectacle, dies at 71

Hulk Hogan, wrestling icon and Trump supporter, dies at 71, leaving behind a legacy in sports and entertainment.

International media groups urge Israel to allow access to Gaza

Media groups express grave concern for Gaza journalists facing starvation, urging Israel to allow access for food supplies.

PM Modi’s Maldives visit, a turnaround in ties 

PM Modi Maldives visit: Prime Minister Modi's visit to Maldives signifies a significant turnaround in India-Maldives relations, strengthening economic and maritime partnerships.

Germany seeks U.S. guarantee before sending Patriots to Ukraine

European NATO members seek guarantees for swift Patriot system replacements if sent to Ukraine, says German Defence Minister.

U.K. launches first sanctions in new strategy to deter migrant crossings

U.K. imposes sanctions on individuals and groups aiding migrant crossings, targeting gangs and suppliers from Balkans, Middle East, and China.

Bangladesh rights group demands “independent investigation” into the air force jet crash that killed many in Dhaka

Human rights group calls for thorough investigation into military aircraft crash in Dhaka, urging transparency and justice for victims.

© 2008 - 2025 Webjosh  |  News Archive  |  Privacy Policy  |  Contact Us