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Reliance Industries inventory tumbles almost 9%; ONGC tanks 11%

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Shares of Reliance Industries tumbled almost 9 per cent in morning commerce on Friday after the federal government imposed an export tax on petrol, diesel and jet gas (ATF).

The authorities on Friday slapped an export tax on petrol, diesel and jet gas shipped abroad by companies like Reliance Industries Ltd, and imposed a windfall tax on crude oil produced domestically by firms reminiscent of ONGC and Vedanta Ltd.

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

It was the largest drag among the many Sensex companies in morning commerce.

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

The BSE benchmark Sensex was buying and selling 551.93 factors decrease at 52,467.01 in morning commerce.

The authorities imposed a Rs 6 per litre tax on export of petrol and ATF and Rs 13 per litre tax on export of diesel, the finance ministry notifications mentioned.

Additionally, it levied a Rs 23,250 per tonne further 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,” mentioned Santosh Meena, Head of Research, Swastika Investmart.

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

The export tax follows oil refiners notably Reliance Industries and Rosneft-backed Nayara Energy, making a killing in exporting gas to deficit areas reminiscent of Europe and the US within the aftermath of Russia’s invasion of Ukraine.