Shares of oil and gas companies such as Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL), and ONGC jumped sharply on Tuesday after the government cut the windfall tax on petroleum crude to zero from Rs 4,100 per tonne.
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The cut in windfall tax will come into effect from today (May 16), providing more relief to oil and gas companies.
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Windfall tax, which is also known as special additional excise duty (SAED), on petrol, diesel and aviation turbine fuel (ATF) were left unchanged at zero as per the recent government notification.
On May 1, the levy on petroleum crude was lowered to 4,100 rupees per tonne from 6,400 rupees per tonne.
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IOC shares were up nearly 4 per cent at around 2 pm, while BPCL rose above 2 per cent. ONGC was also up nearly 1.5 per cent.
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In July 2022, India imposed a windfall tax on crude oil producers and extended the levy on exports of petrol, diesel and ATF after private refiners wanted to make gains from robust refining margins in overseas markets.
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This is reviewed every fortnight on the basis of price fluctuations in international crude rates.
