Key Oil Refiners Crash Upto 15% on Export Tax Hike on Fuel, Fears Loom

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Key Oil Refiners Crash Upto 15% on Export Tax Hike on Fuel, Fears Loom
Credit: © Reuters.

By Malvika Gurung

Investing.com -- The export duty on petrol, diesel and jet fuel or ATF has been raised by up to Rs 13/litre on Friday, and a special additional excise duty of Rs 23,250/tonne will be charged on crude oil produced by domestic companies.

The Centre has also announced an additional tax charged on windfall gains made by domestic refineries, but these will not apply to companies producing less than 2 million barrels/year.

Post the finance ministry’s notification on additional taxes imposed on oil refining and marketing companies, shares of these companies tanked, with industry heavyweights like Reliance Industries (NS: RELI ) plunging 7.3% and ONGC (NS: ONGC ) nosediving up to 14% in the session, as the development is expected to dent these refiners’ earnings.

Sources state that crude oil producers bagged windfall profit worth $45-47/barrel, thanks to the elevated crude oil prices in international markets, and domestic producers are selling the same in parity. The private sector is reaping huge gains by exporting fuel to the European and US markets, especially after sanctions imposed on Russian crude oil exports.

Here’s how key OMC domestic oil refiners ended the session:

  • RIL: -7.3%
  • ONGC: -12.34%
  • Oil India (NS: OILI ): -14.83%
  • Mangalore (NS: MRPL ) Refinery and Petrochemicals: -10%
  • Chennai Petroleum (NS: CHPC ): -5.18%

Read Also: Centre Hikes Export Taxes on Fuel, Windfall Tax on Crude; Which OMCs Exempted?

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