The government on Monday ruled out imposing windfall profit tax on private crude oil producers, saying the levy had been considered to give transparency to the current fuel subsidy sharing mechanism.

"We don't want to penalise private sector oil companies for windfall profits," Rita Menon, special secretary in the finance ministry, said at a Petrotech-2009 conference in New Delhi.

Presently, state-run Oil and Natural Gas Corporation and Oil India Ltd have to bear roughly one-third of the losses on sales of petrol, diesel, domestic LPG and kerosene by way of giving discounts on crude oil they sell to refiners.

ONGC [Get Quote] and OIL reaped huge profits as crude oil prices rose internationally, prompting the government to consider taking away any earnings over and above $75 per barrel through a WPT.

This tax would have provided transparency to the subsidy sharing scheme, she said.

But with crude oil prices plummeting from an all-time high of $147 a barrel in July to four-year low of under $40 a barrel, the possibility of levying WPT has vanished.

The proposal on windfall profit tax is not applicable to the private sector, she said.

"There is no context (for imposing WPT on private sector). Only some fear is there," Menon said.

Asked whether there would be another stimulus package, she said it would be considered if there is demand for that.

To a query whether the package can be given to oil companies, she replied in negative, saying it is high earning sector.