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Business News | Share Prices of Oil Companies Up After Windfall Tax Cut

New Delhi [India]July 20 (ANI): Soon after the government announced a windfall tax cut on crude oil, the share prices of major oil companies rose.

Shares of Oil and Natural Gas Corporation Limited (ONGC) rose nearly 5 percent on Wednesday. Shares of Oil India also gained over 6 percent, GAIL up 2 percent, Bharat Petroleum about 1 percent and Reliance Industries over 2 percent. The Nifty oil and gas index rose 1.6 percent.

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The central government on Wednesday reduced the windfall tax on crude oil to Rs 17,000 per tonne from Rs 23,250. The move comes amid the latest slump in global crude oil prices.

A tax levied on an unexpected or unexpectedly large gain is called a windfall tax.

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A government notification has informed that the new rate will be effective from today Wednesday.

“Starting July 1, the GOI has imposed a windfall tax on oil producers and refiners that benefited from higher overseas refining spreads and global crude prices, thus reaping supernormal profits. However, due to the current fall in global crude prices, the government has reversed the above decision. The move is positive for companies like Reliance, ONGC and Chennai Petrochem Ltd.” Said Punit Patni, Equity Research Analyst, Swastika Investmart Limited.

Not only this, recently the special additional excise duty on diesel for export has been reduced from Rs 13 per liter to Rs 10 per litre.

For petrol, export tax has been removed. On July 1, an export tax of Tk 6 per liter of petrol was imposed.

As exports were becoming highly profitable, it was observed that some refiners were running dry at their pumps in the domestic market, an official statement said. (ANI)

(This is an unedited and auto-generated story from a syndicated news feed, most recent staff may not have changed or edited the content body)

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