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New Delhi: India has cut a windfall tax on oil producers and refiners and exempted gasoline from an export levy, less than three weeks after it imposed the two charges.
Shares in oil companies that will benefit from the move rose. Reliance Industries jumped 4.3%, Oil India 8.8%, Oil and Natural Gas Corp 6.8% and Vedanta 4.3%.The government said in a statement an export tax of Rs 6 a litre no longer applied to gasoline. It had also reduced duty on diesel and aviation-fuel exports by 2 rupees a litre to 10 rupees and 4 rupees a litre, respectively, it said.
A windfall tax on domestically produced crude oil was cut to Rs 17,000 a tonne from Rs 23,250.
Removal of the charge on gasoline will particularly benefit Reliance’s 704,000-barrel-per-day export-focused refinery at Jamnagar in Gujarat state.
All changes took effect on July 20.
On July 1, India imposed the windfall tax on crude oil producers and levies on exports of gasoline, diesel and aviation fuel after private refiners turned to overseas sales to gain from robust refining margins instead of selling at lower-than-market rates in the country.
Global crude oil prices and refining margins for gasoline, gasoil and jet fuel have eased since imposition of the taxes.
As a result of this move, Indian shares rose more than 1% to a six-week high on Wednesday, July 20 as shares of oil producers and refiners surged.
The NSE Nifty 50 index gained 1.2% to 16,537, as of 0458 GMT, while the S&P BSE Sensex was up 1.3% at 55,459.14. Both the indexes hit their highest since June 6.