Reliance Industries plunge over 8%, on excise duty hike on fuel
Published On: Friday, July 1, 2022 | By: Team KnowMyStock
Shares of Reliance Industries Ltd (RIL), witnessed a sharp fall after the export tax hike announcement. RIL shares plunged more than 7%, its biggest decline in about 18 months, The sharp drop can be attributed to the government levying additional tax on domestically produced crude oil to take away windfall gains, according to experts. “Reliance is witnessing a sharp fall after the Government has levied taxes on windfall gains made by domestic refineries. The government on Friday announced an increase in taxes on the export of petrol, diesel, and aviation turbine fuel (ATF). The centre has also mandated exporters to meet the requirements of the domestic market first. The government has levied a ₹6 per litre tax on exports of petrol and ATF and ₹13 per litre on exports of diesel.
The government has also announced taxes on windfall gains made by crude oil producers. The government also slapped a ₹23,230 per tonne additional tax on domestically produced crude oil to take away windfall gains accruing to producers from high international oil prices, a separate government notification showed.
The taxes on exports come after oil refiners, particularly from the private sector, attracted huge gains from exporting fuel to markets such as Europe and the US amid a surge in international oil prices.
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,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Tags: #RIL #exporttax #crudeoil
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