Reliance, ONGC Shares Crash On Fuel Export And Windfall Tax
Reliance Industries and ONGC shares were hammered on Friday after the government imposed export taxes on petrol, diesel and a windfall tax on domestic crude oil to boost internal supplies.
India introduced a windfall tax on oil producers that had profited from increased global crude prices and introduced export duties for petrol, diesel, and jet fuel, sending energy stocks into a tailspin.
The Nifty Energy index fell 3.7 per cent in its sharpest drop since mid-May.
Reuters reported that oil-to-retail giant Reliance Industries Limited (RIL), India's most valuable company, shed $19.35 billion in market value as its stock plunged as much as 8.7 per cent, marking its biggest intraday slide since November 2, 2020.
RIL stock was the last trading over 6 per cent lower at Rs 2,436 per share, with the market capitalisation standing at ₹ 16.5 lakh crore, on the BSE index.
State-owned oil producer ONGC plummeted 12.3 per cent - its biggest slide since the pandemic-wrecked March 23, 2020. Oil India slid nearly 11 per cent, while Mangalore Refinery and Petrochemical slumped 10 per cent.
The government slapped a ₹ 6 per litre tax on the export of petrol and ATF and ₹ 13 per litre tax on the export of diesel, finance ministry notifications showed. Additionally, it levied a ₹ 23,250 per tonne additional tax on crude oil produced domestically.
The levy on crude, which follows record earnings by state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) and private sector Cairn Oil & Gas of Vedanta Ltd, alone will fetch the government ₹ 67,425 crores annually on 29 million tonnes of crude oil produced domestically.