Reliance Industries stock tumbles nearly 9% on ‘export tax’

PTI | | Updated on: Jul 01, 2022

Shares of ONGC also tanked 11% to ₹134.60 apiece

Shares of Reliance Industries tumbled nearly 9 per cent in morning trade on Friday after the Centre imposed an ‘export tax’ on petrol, diesel and jet fuel (ATF).

The government on Friday slapped an export tax on petrol, diesel and jet fuel shipped overseas by firms like Reliance Industries Ltd, and imposed a windfall tax on crude oil produced locally by companies such as ONGC and Vedanta Ltd.

Shares of Reliance Industries fell 8.65 per cent to ₹2,369.45 apiece on the BSE.

It was the biggest drag among the Sensex firms in morning trade.

Shares of ONGC tanked 11 per cent to ₹134.60 apiece and Vedanta declined 7.55 per cent to hit its 52-week low of ₹206.10 on the BSE.

The BSE benchmark Sensex was trading 551.93 points lower at 52,467.01 in morning trade.

The government imposed a ₹6 per litre tax on export of petrol and ATF and ₹13 per litre tax on export of diesel, the finance ministry notifications said.

Additionally, it levied a ₹23,250 per tonne additional tax on crude oil produced domestically.

"Reliance is witnessing a sharp fall after the government levied taxes on windfall gains made by domestic refineries. Earlier, Reliance was firing on all cylinders but now there is a break in its refinery business as the commodity cycle is also reversing, however other verticals have strong growth potential," said Santosh Meena, Head of Research, Swastika Investmart.

The levy on crude, which follows record earnings by state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) and private sector Cairn Oil & Gas of Vedanta Ltd, alone will fetch the government ₹67,425 crore annually on 29 million tonne of crude oil produced domestically.

The export tax follows oil refiners particularly Reliance Industries and Rosneft-backed Nayara Energy, making a killing in exporting fuel to deficit regions such as Europe and the US in the aftermath of Russia's invasion of Ukraine.

Published on July 01, 2022
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