ONGC, Oil India shares rise 5% as govt cuts windfall tax on crude
India first imposed windfall profit tax on July 1, joining a growing number of nations that tax profits of energy companies. At that time, export duties of Rs 6 per litre (USD 12 per barrel) each were levied on petrol and ATF, and Rs 13 a litre (U...
By Navdeep Singh, |
Agencies
Shares of PSU firms ONGC and Oil India rallied 5% in Thursday's trade on BSE after the government reduced the windfall profit tax levied on domestically-produced crude oil as well as on the export of diesel and ATF.
Windfall tax on crude petroleum was cut to Rs 4,350 from Rs 5,050/tonne, while special additional excise duty on ATF cut to Rs 1.50/L from Rs 6/litre. The special additional excise duty on diesel has been cut to Rs 2.50/L from Rs 7.50/L.
Earlier on February 4, the govt had hiked the windfall tax on domestically-produced crude oil, as well as on the export of diesel and ATF.
India first imposed windfall profit tax on July 1, joining a growing number of nations that tax profits of energy companies. At that time, export duties of Rs 6 per litre (USD 12 per barrel) each were levied on petrol and ATF, and Rs 13 a litre (USD 26 a barrel) on diesel.
The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks. The government levies a tax on windfall profits made by oil producers on any price they get above a threshold of USD 75 per barrel.
The levy on fuel exports is based on cracks or margins that refiners earn on overseas shipments. These margins are primarily a difference between the international oil price realised and the cost.
As of 1.40 pm, Oil India stock was trading 5% higher at Rs 260, while ONGC stock was trading 4.3% higher at Rs 153.8 on BSE.
ONGC reported a 26% year-on-year (YoY) rise in net profit for the quarter ended December 2022 to Rs 11,045 crore. Its revenue from operations increased nearly 36% YoY to Rs 38,583.3 crore.
Brokerage firm Prabhudas Lilladher maintained its buy rating on ONGC with a target price of Rs 190.
"Higher blended gas realization of USD9.2/mmbtu (Q2:$6.8) drive Q3 earnings. With the KG98/2 field coming on stream we expect ONGC’s oil and gas production to increase by 4-5%. Maintain Buy rating with PT of Rs 190 (Rs 180 earlier) based on 3.5x EV/E FY24E," Prabhudas said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Windfall tax on crude petroleum was cut to Rs 4,350 from Rs 5,050/tonne, while special additional excise duty on ATF cut to Rs 1.50/L from Rs 6/litre. The special additional excise duty on diesel has been cut to Rs 2.50/L from Rs 7.50/L.
Earlier on February 4, the govt had hiked the windfall tax on domestically-produced crude oil, as well as on the export of diesel and ATF.
India first imposed windfall profit tax on July 1, joining a growing number of nations that tax profits of energy companies. At that time, export duties of Rs 6 per litre (USD 12 per barrel) each were levied on petrol and ATF, and Rs 13 a litre (USD 26 a barrel) on diesel.
The tax rates are reviewed every fortnight based on average oil prices in the previous two weeks. The government levies a tax on windfall profits made by oil producers on any price they get above a threshold of USD 75 per barrel.
The levy on fuel exports is based on cracks or margins that refiners earn on overseas shipments. These margins are primarily a difference between the international oil price realised and the cost.
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As of 1.40 pm, Oil India stock was trading 5% higher at Rs 260, while ONGC stock was trading 4.3% higher at Rs 153.8 on BSE.
ONGC reported a 26% year-on-year (YoY) rise in net profit for the quarter ended December 2022 to Rs 11,045 crore. Its revenue from operations increased nearly 36% YoY to Rs 38,583.3 crore.
Brokerage firm Prabhudas Lilladher maintained its buy rating on ONGC with a target price of Rs 190.
"Higher blended gas realization of USD9.2/mmbtu (Q2:$6.8) drive Q3 earnings. With the KG98/2 field coming on stream we expect ONGC’s oil and gas production to increase by 4-5%. Maintain Buy rating with PT of Rs 190 (Rs 180 earlier) based on 3.5x EV/E FY24E," Prabhudas said.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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