Govt increases windfall tax on domestic crude, reduces duty on jet fuel; OMCs revise commercial LPG rates; here is how related stocks are performing
Last seen, shares of ONGC, Oil India, Mangalore Refinery & Petrochemicals Limited (MRPL), and Chennai Petroleum Corporation rose from 0.46 per cent to 3.72 per cent.
The government of India has made revisions concerning windfall tax and fuel rates, which will be applicable from today, November 1. Here are some stocks that reacted to the changes:
Upstream stocks
Oil production and exploration stocks, Oil India, Oil and Natural Gas Corporation (ONGC), Mangalore Refinery & Petrochemicals Limited (MRPL), and Chennai Petroleum Corporation traded positively on the exchanges despite the government's move to increase the windfall tax by Rs 750/tonne and reduce the levy on exports of diesel.
A windfall tax is a tax levied on a specific commodity, such as crude oil, when the price of that commodity increases dramatically.
By increasing the windfall taxes, the government has indirectly made exporting oil more expensive, therefore discouraging the same.
Last seen, shares of ONGC, Oil India, Mangalore Refinery & Petrochemicals Limited (MRPL), and Chennai Petroleum Corporation rose from 0.46 per cent to 3.72 per cent.
Aviation stocks
Airline stocks traded mixed after the government reduced the duty on jet fuel, or Aviation Turbine Fuel (ATF), to zero/litre, effective November 1.
At the time of filing this report, shares of InterGlobe Aviation or IndiGo were down 0.64 per cent, and SpiceJet shares were flat by 0.03 per cent on the downside. On the other hand, Jet Airways shares were up over 1 per cent.
Oil marketing companies (OMC) stocks
OMCs, which deal with the processing and delivery of crude, increased the prices of commercial LPG cylinders in various locations throughout the country. This marks the second price hike for commercial LPG cylinders in the past two months.
Last seen, shares of Hindustan Petroleum Corporation Ltd (HPCL), Indian Oil Corporation, and Bharat Petroleum Corporation (BPCL) rose between 1.15 per cent to 2.49 per cent.
An upward revision in the prices of LPG is beneficial to OMCs.
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