Reliance Industries shares rise 1%, ONGC gains 3% as govt cuts windfall tax on crude oil
1 min read . Updated: 16 Feb 2023, 10:59 AM IST
Premium- In the sector pack BSE oil and gas, shares of RIL, ONGC, Indian Oil GAIL were in the green, while Hindustan Petroleum, BPCL, Gujarat Gas were in the red
Shares of oil refiners and producers surged on Thursday after the government slashed windfall taxes on domestically-produced crude oil and export duty on diesel and jet fuel due to falling oil prices in global markets.
In the sector pack BSE oil and gas, shares of RIL, ONGC, Indian Oil GAIL were in the green, while Hindustan Petroleum, BPCL, Gujarat Gas were in the red.
Shares of the country's most valued company, Reliance Industries advanced 1.08% to ₹2,456.35 on the BSE, while Oil and Natural Gas Corporation (ONGC) shares were trading 3.19% at ₹152.20 per equity share.
On Thursday, shares of Indian Oil Corp were 0.19% higher at ₹79.65 apiece, while GAIL (India) Limited was trading at ₹95.45 per share, up 0.16% the BSE.
Windfall tax on crude was cut to ₹4,350 per tonne from ₹5,050 per tonne, effective Thursday, according to a government notification dated 15 February.
The government has also cut export tax on aviation turbine fuel (ATF) to ₹1.50 a litre from ₹6 rupees a litre, and reduced export tax on diesel to ₹2.50 a litre from ₹7.50 a litre, the order said.
Petrol continues to be out of the windfall tax, showed the order.
The windfall tax on domestic crude oil targets crude producers like Vedanta and state-run ONGC, while RIL and Nayara Energy are private refiners who export diesel and ATF.
In a post-budget interview with Mint, revenue secretary Sanjay Malhotra had said that the government estimates around ₹25,000 crore of revenue receipts in the current financial year from the windfall profit tax.
Malhotra also said then that in the case of petrol, it has already been removed and the levy will apply on crude oil and products only if there is a windfall profit.
India had in July 2022 imposed the windfall tax on crude oil producers and levies on exports of gasoline, diesel and aviation fuel after private refiners wanted to make gains from robust refining margins in overseas markets, instead of selling it cheap at home
The cuts came as refiners continued to stock up discounted Russian fuel amid a steady increase in domestic consumption.