Reliance, ONGC Shares Crash On Fuel Export And Windfall Tax

Reliance, ONGC Shares Crash On Fuel Export And Windfall Tax
Indian shares slide as Reliance, ONGC crash on fuel export duties.

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.