Oil and gas company stocks sank in the deep red zone in the afternoon trades on Friday, May 27
Oil and gas company stocks sank in the deep red zone in the afternoon trades on Friday, May 27, with companies like ONGC down 9 per cent and BPCL 5 per cent
- Last Updated:May 27, 2022, 14:47 IST
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Oil and gas company stocks sank in the deep red zone in the afternoon trades on Friday, May 27, with companies like ONGC down 9 per cent and BPCL 5 per cent. This came on the heels of reports stating that the Indian government is considering a so-called windfall tax on oil and gas producers (state-owned as well as private) to offset ballooning public expenditure on fuel, food, and fertiliser subsidies amid skyrocketing inflation.
The tax, which may be levied when oil prices, for instance, cross a certain level, will boost the government’s finances, and help fund efforts to protect vulnerable sections from rampant inflation, an HT report quoting sources.
Windfall tax is, simply, a tax levied on companies whose financials have been boosted purely by luck, or events for which they are not responsible. For instance, energy companies have benefitted from the global spike in energy prices on account of Russia’s invasion of Ukraine.
ONGC Shares Slump
Shares of Oil and Natural Gas Corporation (ONGC) hit a four-month low of Rs 142.35, down 6 per cent on the BSE in Friday’s trade after the company said it will invest Rs 31,000 crore over the next three years in exploring the Indian sedimentary basin for fuel reserves and on reports of a windfall tax to be put in place by the government.
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Source: News18