The windfall tax on domestic crude oil production and fuel exports is being abolished by the government due to the decline in global oil prices.
The finance ministry will soon issue an official order in response to the petroleum ministry's request to repeal the tax.
The windfall tax was initially introduced in 2022 during a period of high oil prices caused by the Russia-Ukraine conflict.
It imposed an additional excise duty on local crude production and exports of petrol, diesel, and jet fuel.
As of September 18, 2023, the tax on crude oil production has been reduced to zero from Rs 1,850 per tonne earlier in the month.
Industry stakeholders have called for more stability and an end to the fortnightly review process that adds uncertainty to an industry requiring significant capital investment.