Reliance Industries, Other Oil Refiners Fall Sharply After Windfall Tax Levied
Reliance Industries shares along with other oil refining companies have been hit badly in trade today. Shares of Reliance Industries emerged as the top Nifty loser cracking as much as 8.69%to day’s low price of Rs. 2370.1. Other upstream companies that lost big time include Oil India (down over 4%) , Chennai Petroleum (down over 8%), MRPL (down over 9%) and HOCE (down over 5%).
Primarily, the losses in these scrips are triggered after the government has levied windfall tax on domestic oil refining companies.
At the same time, Reliance Industries scrip is also facing the pressure as the government has raised export duty on diesel by Rs. 13/litre while for petrol the hike is to the tune of Rs. 6 per litre.
Windfall tax on oil companies has been considered in the wake of the Ukraine-Russia crisis which led the crude to soar in price. And so, while the government exchequers are in financial distress and taking measures to curb inflation, oil and gas companies around the world-whether upstream, downstream or mid-stream are minting money. So, there has been mulled windfall tax on oil companies that are gaining from the rise in crude price.