Shares of two oil explorers rose by 4.91% to 5.69% after the Central Government reduced the windfall profit tax on petrol, diesel, jet fuel and crude oil.
Oil and Natural Gas Corporation (ONGC) (up 5.69%) and Oil India (up 4.91%) climbed.Meanwhile, the Nifty 50 index was up 0.09% to 18,032.00. The Nifty Oil & Gas index was up 0.36% to 7,220.15.
The Centre on Thursday cut windfall tax on crude petroleum to Rs 4,350 from Rs 5,050 per tonne while special additional excise duty on ATF cut to Rs 1.50 per litre from Rs 6 per litre. The special additional excise duty on diesel has been cut to Rs 2.50 per litre from Rs 7.50 per litre.
The government levies tax on windfall profits made by oil producers on any price they get above a threshold of $75 per barrel. The taxes are reviewed every fortnight based on international oil prices.
The windfall profit taxes were first imposed in July last year. At that time, the Ministry of Finance imposed a cess of Rs 23,250 per tonne (by way of special additional excise duty - SAED) on crude oil produced domestically. It also slapped a Rs 6 per litre tax on the export of petrol and jet fuel (ATF) and Rs 13 a litre on the export of diesel effective 1 July 2022.
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