Energy stocks ONGC, Oil India, MRPL and Chennai Petro surge as government cuts windfall tax cuts on diesel exports

Oil & Gas companies such as Oil and Natural Gas Corporation (ONGC), Oil India Limited (OIL), Mangalore Refinery & Petrochemicals (MRPL), Chennai Petroleum Corporation and Reliance Industries were in the green on the exchanges during the early morning session on Monday.

Energy stocks like ONGC, Oil India, MRPL, Chennai Petro and Reliance were each up on the BSE during Monday's session - Image Source: Pixabay

Most energy stocks were in the green during Monday’s trading session. Shares of upstream firms such as Oil and Natural Gas Corporation (ONGC), Oil India Limited (OIL), Mangalore Refinery & Petrochemicals (MRPL), Chennai Petroleum Corporation and Reliance Industries surged up to 4 per cent on the BSE intraday after the government slashed windfall tax on export of diesel.

Individually, MRPL shares gained the most by around 4 per cent, followed by Chennai Petro up over 2.5 per cent, while ONGC, Oil India and Reliance shares gained between 0.5-1.5 per cent on the BSE.

The government slashed windfall profit tax on the export of diesel to its lowest of Rs 0.50 per litre and nil on jet fuel (ATF) while the levy on domestically produced crude oil was marginally increased, as per an official order, a PTI report said on Saturday.

TRENDING NOW

It has cut the tax on the export of diesel to Rs 0.5 per litre from Rs 2.5, and the same on overseas shipments of ATF was cut to nil from Rs 1.50 a litre. While the levy on crude oil produced by companies such as ONGC was hiked to Rs 4,400 per tonne from Rs 4,350 per tonne.

This is the second reduction in rates in a fortnight, earlier they were cut on February 16, 2023, and the export levy on diesel and ATF is the lowest since the tax was introduced in July last year, according to a PTI report.

Brokerage Upbeat on Oil & Gas

Amid the government’s decision to cut windfall profit tax on the export of diesel, global brokerage firm CLSA is bullish on Oil & Gas sector. It has maintained a ‘buy’ rating on the counters such as ONGC, Oil India and Reliance Industries, with a target price of Rs 225, Rs 300 and Rs 2,970 apiece, respectively.