Shares of oil and gas companies continued its losing streak for the second straight session on Monday after the Centre last Friday announced a special additional excise duty on crude oil production. Weighed down by the development, energy heavyweights have fallen up to 20% in the last two sessions, led by state-owned companies -- Oil India, Oil and Natural Gas Corporation (ONGC), Mangalore Refinery & Petrochemicals (MRPL), and Chennai Petroleum Corporation Limited (CPCL).

Shares of Oil India have plunged 20% in two sessions, while ONGC tumbled 18% during this period. Reliance Industries, the country’s most valued firm, also nosedived as much as 8.7% in two days. In comparision, the BSE Sensex gained 0.1% during the period under the review.

On Monday, the BSE energy index dropped 0.9% in the first two hours of trade so far, led by ONGC which fell up to 4%. Oil India shed 3.5%, while MRPL and CPCL declined over 2% each. Among others, Indian Oil, and BPCL slipped up to 1% during the session so far.

Private player Reliance Industries also opened lower for the second straight session and dropped as much as 1.7% to hit an intraday low of ₹2,367, against the previous closing price of ₹2,408.95 on the BSE. The oil-to-telecom conglomerate had fallen 7.2% on Friday. However, reversing early losses, the stock was trading 0.2% higher at ₹2,414 levels at the time of reporting.

The oil and gas stocks have been reeling under selling pressure since Friday after the government hiked export taxes on fuel and imposed an additional tax charged on windfall gains made by domestic refineries. The Centre levied a special additional excise duty of ₹6 per litre on exports of petrol, ₹13 per litre on exports of diesel, and ₹6 per litre on exports of aviation turbine fuel (ATF) to ease pressure on the current account deficit in the backdrop of the rising imports bill. The government, however, has said there would be no impact of export tax on domestic fuel prices.

The ministry of finance, in a notification issued on Friday, said a cess of ₹23,250 per tonne by way of special additional excise duty (SAED) has been imposed on crude. “Crude prices have risen sharply in recent months. The domestic crude producers sell crude to domestic refineries at international parity prices. As a result, domestic crude producers are making windfall gains. Taking this into account, a cess of ₹23,250 per tonne has been imposed on crude. Import of crude oil would not be subject to this cess,” FinMin said.

The ministry said crude is sold by the domestic producer at an international parity price and the cess will have no adverse impact, whatsoever, on domestic petroleum products/fuel prices. Further, small producers, whose annual production of crude in the preceding financial year is less than 2 million barrels, will be exempt from this cess. Also, to incentivise an additional production over the preceding year, no cess will be imposed on such quantity of crude that is produced in excess of last year's production by a crude producer.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.