InvestorQ : What is the likely to be the business impact of the windfall tax on oil companies?
Niti Shenoi made post

What is the likely to be the business impact of the windfall tax on oil companies?

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ishika Banerjee answered.
1 month ago
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Over the weekend, the government had imposed the windfall tax on domestic production of crude, the refining of crude and also on ATF, apart from petrol and diesel. In addition, the export levies on these products were hiked sharply to ensure more domestic usage of oil. Now, a couple of days after the windfall tax was imposed by the government on the domestic production and export of oil, the first full-fledged calculations are out.

The hit is going to be hard for Reliance Industries. The tax will wipe off $10-12 from the gross refining margins (GRM) of Reliance in the coming quarter. Additionally, ONGC and Oil India will take a big hit on earnings in the range of 35-40%. However, the government will be able to partially offset the losses of inflation control as it will collect Rs130,000 crore from this levy. IT has also levied Rs23,250 per tonne on crude extracted.

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