Shares of oil and gas producers surged after the central government cut taxes on diesel, aviation turbine fuel (ATF) and edible oil. According to a government notification on Sunday, in the sixth round of revision, the windfall tax on domestic crude oil has been slashed by 24% to ₹8,000 per tonne from ₹10,500. Moreover, the tax levy on export the of diesel has been halved to ₹5 per litre, and the levy of ₹5 per litre has been scrapped on the export of jet fuel, with effect from October 2.

Following this development, shares of Oil & Natural Gas Corporation Ltd, the country’s largest oil retailer, surged 4.42% to hit ₹132, while the Bharat Petroleum Corporation Ltd (BPCL) stock rose 1.3% to ₹308.60. Shares of Hindustan Petroleum Corporation Ltd surged as much as 1.37% to hit an intra-day high of ₹221, whereas the Reliance Industries stock traded as much as 0.79% higher to hit an intra-day high of ₹2,416. The Nifty Oil & Gas index was down 1.36% to 7,359 in the closing trade.

Meanwhile, shares of SpiceJet surged 1.41% to hit an intraday high of ₹39. The aviAviatione fuel (ATF) constitutes 40% of the running cost of an airline.

Notably, after witnessing early gains, the BSE Sensex slumped 638 points or 1.11% to close at 56,788, whereas the NSE Nifty 50 index declined by 207 points or 1.21% to close at 16,887, much lower than the 17,000 psychological mark. At the interbank exchange, the Indian rupee crashed by 49 paise to close at 81.89 against the US dollar, after the crude oil prices surged by 4% in the international market following the Organization of the Petroleum Exporting Countries’ (OPEC+) announcement of lowering the output by more than $1 million barrels per day, the highest since 2020. The Brent crude oil benchmark rebounded 4.1% or $3.46 to $88.60 per barrel, whereas the US West Texas Intermediate crude surged 4.3% higher at $82.88.

On July 1 this year, the Indian government joined a group of nations that have imposed a windfall l tax on crude oil owing to soaring energy prices. The government had imposed a cess of ₹23,250 per tonne on domestic crude oil, and sapped a ₹6 per litre tax and ₹13 per litre tax on the export of petrol and diesel respectively.

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