Shares of oil exploration production companies like Oil and Natural Gas Corporation (ONGC), Oil India, Mangalore Refinery & Petrochemicals (MRPL), and Chennai Petroleum Corporation – zoomed up to 9.5 per cent on the BSE intraday on Monday as the government cut windfall profit tax on domestic crude oil.

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The government on Saturday slashed the windfall profit tax on locally produced crude oil and diesel, in line with a fall in international rates and scrapped the levy on the export of jet fuel with effect from October 2, 2022, according to a news agency PTI report.

The report said that the government reduced the tax on domestically produced crude oil to Rs 8,000 per tonne from Rs 10,500 per tonne at the sixth fortnightly review and the levy on the export of diesel was reduced to Rs 5 per litre from Rs 10 per litre.

Similarly, the tax at the rate of Rs 5 a litre on Aviation Turbine Fuel (ATF) exports was scrapped with effect from October 2, according to a finance ministry notification issued late Saturday night.

Individually, MRPL shares gained most up by around 9.5 per cent to Rs 64.9 per share on the BSE intraday, followed by ONGC shares up over 6 per cent to 134.65 per share. While Oil India and Chennai Petro shares were up around 4.5 per cent each to Rs 182.1 and Rs 245.45 per share.

The reduction in the tax rates follows the easing of crude oil prices in international markets. Brent crude futures were trading at $87.29 a barrel and US West Texas Intermediate crude was at $81.58 on Monday.

Oil has soared in 2022, coming close in March to an all-time high of $147 after Russia's invasion of Ukraine exacerbated supply concerns. Fears about a global recession, rising inflation, and weaker demand have since weighed on prices.