Reliance, ONGC, Indian Oil shares slip after hike in windfall tax on crude

Shares of oil and gas companies like Oil and Natural Gas Corporation (ONGC), Reliance Industries and Bharat Petroleum Corporation Limited (BPCL) traded mixed on Thursday after the government revised the windfall tax on domestically-produced crude oil and export duty on diesel and jet fuel.

In the sector pack BSE oil and gas, shares of Gujarat Gas, BPCL, IGL, Hindustan Petroleum, and GAIL were in the green, while Indian Oil, Petronet LNG, Reliance, and ATGL were in the red.

The mixed trend comes after the government increased the windfall profit tax on the export of diesel to Rs 13.5 per litre and jet fuel to Rs 9 a litre, besides raising the levy on domestically-produced crude oil to Rs 13,300 per tonne from Rs 13,000, in line with the hardening of global prices.

A windfall tax is a one-off tax imposed by a government on a company when the firm or industry benefits from something that they are not responsible for, the financial gain that ensues is called windfall profits. Governments typically levy a one-time tax over and above the normal tax rates on such profits, which is called windfall tax.

The export tax has been raised as margins rose following slight changes in international oil prices and on expectations of a price rise in hopes of a production cut by the Organisation of Petroleum Exporting Countries (OPEC) and its allies.

At 11:30 am, Brent crude was down 0.73 percent to $94.94 a barrel at 11:32 am.

India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super normal profits of energy companies. But international oil prices have cooled since then, eroding the profit margins of both oil producers and refiners.