Shares of Mukesh Ambani-led Reliance Industries rose as much as 3.85 per cent to hit an intraday high of Rs 2,535 on the BSE after the government on Wednesday scrapped a three-week-old tax on the export of petrol and cut windfall taxes on overseas shipment of diesel and ATF as well as the one imposed on domestically produced crude oil after global oil prices fell.
While the Rs 6 a litre export duty on petrol was scrapped, the tax on the export of diesel and jet fuel (ATF) was cut by Rs 2 per litre each to Rs 11 and Rs 4 respectively, government notifications showed.
The tax on domestically produced crude was also cut to Rs 17,000 per tonne from Rs 23,250, a move that will benefit producers like ONGC and Vedanta Ltd.
Also, overseas shipments from refineries located in export-focused ones were exempted from the levies that were imposed on July 1.
On July 13, PTI had reported that the windfall tax review was expected following a sharp fall in global oil prices.
The cut in windfall tax will benefit Reliance Industries Ltd, which operates two oil refineries at Jamnagar in Gujarat with one focused only on exports.
Oil and Natural Gas Corporation (ONGC), as well as Vedanta Ltd, would benefit from the cut in the tax on domestic oil producers.
The refining spread for diesel almost halved from the $55-60 per barrel peak seen in June to $30 a barrel. Similarly, ATF spreads crashed from $50-55 per barrel to $25-30. Gasoline spreads have also been slashed from $30-35 per barrel last month to $10-15.
At the same time, the Brent crude price has also cooled off by $15-20 per barrel in the past 2-3 weeks to about $100 per barrel.
When the taxes were introduced, it was estimated that they would bring over Rs 1 lakh crore additional revenue in the full year.
The windfall tax on crude production alone was estimated to generate revenue of Rs 65,600 crore and tax on export products another Rs 52,700 crore if they were to be continued for the full year.
Reliance Industries shares ended 2.47 per cent higher at Rs 2,501.
