Mumbai: India’s most valued company () fell on Friday as shares of oil refiners and producers slumped after the government imposed an export tax on petrol, diesel and aviation turbine fuel (ATF) as well as a windfall tax on crude oil produced locally. The measures dented market expectations of further record profits, which have been driven by elevated oil prices and a global energy deficit, said analysts.
RIL shares dropped 7% – the biggest single-day fall since November 2020 – to Rs 2,408.95 on Friday. That weakness weighed down the Sensex and Nifty, which ended about 0.2% lower.
Among oil producers,
tumbled 13.4%, Oil India slumped 15.1% and declined 4% while among refiners, & () fell 10% and (CPCL) shed 5.2%. The BSE Energy index was the biggest laggard among sector indices, down 4%.
With about 58% of RIL’s refined products being exported, the blended impact for the company could be about ₹3.4 per litre, translating to around $7 per barrel impact on realised gross refining margin, said Jefferies. “This will be a short-term hit on the stock as it is sentiment negative,” said Siddarth Bhamre, research head at Religare Securities. “Refiners have been making windfall gains on these exports in the current scenario.”
The new tax and export restrictions could hurt the earnings of ONGC, Oil India and RIL, said analysts. “The earnings impact on RIL could be 7-8% and in the case of ONGC the impact could be as high as 40-50%,” said Hemang Jani, head of equity strategy, broking and distribution,
. “It is a big setback for upstream companies as profits will get taken away at a time of crude upcycle. The government will review this on a fortnightly basis which adds to an element of uncertainty.”
Domestic oil marketing companies
and gained 5.2% and 3.1%, respectively, after the government’s measures.
Stay connected with us on social media platform for instant update click here to join our Twitter, & Facebook
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsAzi is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
