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Oil stocks tumbled up to 11 per cent today following reports that the government may levy a windfall tax on oil producers like ONGC as part of a permanent solution it is working on for moderating the spiralling retail prices of petrol and diesel.
Shares of Oil & Natural Gas Corporation tanked 11.44 per cent to Rs 155.45 on the BSE. Oil India Ltd tumbled 11.23 per cent to Rs 204.65.
The tax, which may come in the form of a cess, will kick in the moment oil prices cross $70 per barrel, sources privy to the development said.
Under the scheme, oil producers, who get paid international rates for the oil they produce from domestic fields, would have to part with any revenue they earn from prices crossing $70 per barrel mark.
Petrol and diesel prices were raised for the 11th day in succession today as the state-owned oil firms gradually passed on to the consumer the increased cost of international oil that had accumulated since a 19-day freeze was imposed just before Karnataka elections.
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