Following a decline in international rates, the government on Wednesday slashed the windfall tax on petrol diesel, jet fuel and crude oil.
According to the notifications released by the finance ministry, the government has slashed a ₹6 per litre tax on the export of petrol. The tax on diesel has been reduced from ₹13 per litre to ₹ 11 and on ATF from ₹6 per litre to ₹ 4 per litre. In addition, the ₹ 23,250 per tonne additional tax on crude oil produced domestically has been cut to ₹ 17,000 per tonne.
Earlier, when the government had slapped this windfall tax on oil exporters, the shares of companies like Reliance Industries Limited and ONGC had plummeted. However, the shares of these companies climbed 4% and 7% respectively on Wednesday’s early trades.
“The relief announced by the government for the petroleum sector through reduction in windfall tax and cuts in duties on exports will be a major boost for the sector, particularly for RIL,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Reliance Industries Limited
The shares of the Sensex heavyweight are trading at ₹ 2508.70 apiece and are up 2.93% as of 12:35 PM on Wednesday. They have crossed the ₹ 2500 mark and brokerages are bullish on their shares.
Emkay Global has a buy call on the shares of Reliance Industries with a target price of ₹ 2800 per share. This translates to an upside of 11.61%. The time period given by the analyst is one year when the company’s shares can reach the defined target.
Oil & Natural Gas Corporation Limited (ONGC)
The shares of ONGC surged 7% on Monday’s early trades. They are currently trading at ₹ 133.70 apiece. Emkay Global has a buy call on the shares with a target price of ₹ 185 apiece, achievable in one year. This translates to an upside of 38.37%.
Written By Simran Bafna
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