Govt ups windfall tax on domestic crude, revises commercial LPG, jet fuel rates; here is how related stocks are performing

The government of India has made several changes with respect to fuel and LPG rates, which are applicable from October 1. Here are some stocks that reacted to the changes:

Oil and gas stocks

Oil and gas stocks were a mixed bag after the government revised the windfall tax on domestically produced crude oil. On Friday, September 29, the government hiked special additional excise duty (SAED) on crude petroleum to Rs 12,100 per tonne with effect from September 30.

A windfall tax is a tax levied on a specific commodity, such as crude oil, when the price of that commodity increases dramatically.

By increasing the windfall taxes, the government has indirectly made exporting oil more expensive and therefore discouraged the same.

The impact of this decision will be seen on upstream companies such as Oil and Natural Gas Corporation Ltd (ONGC) and Oil India.

As of 12:00 p.m., ONGC shares were down 3.99 per cent on the BSE at Rs 184.15 apiece, and Oil India shares were down 1.86 per cent at Rs 293.1 apiece.

Aviation stocks

The government reduced the duty on jet fuel, or Aviation Turbine Fuel (ATF), to Rs 2.5 per litre, effective October 1. Also, ATF prices have been increased by 5 per cent to around Rs 5,779.84/KL, which will be beneficial to state-owned Mangalore Refinery & Petrochemicals (MRPL), according to Zee Business research, as the company is into refining and marketing the jet fuel.

As of 12:00 p.m., shares of stated-owned Mangalore Refinery & Petrochemicals (MRPL) traded 0.77 per cent higher at Rs 96.25 apiece.

However, an increase in jet fuel prices is negative for airline companies as the cost of operations goes up. However, at the time of writing this report, shares of SpiceJet were up 0.92 per cent at Rs 36.33 apiece, Jet Airways shares hit the upper circuit limit of 5 per cent in the morning trade at Rs 58.7 apiece. InterGlobe Aviation (IndiGo) shares gained 1.57 per cent at Rs 2,419 apiece.

Oil marketing companies (OMC) stocks

OMCs made an upward revision in the rates of commercial gas cylinders after the government hiked the prices of commercial LPG cylinders on Sunday.

As of 12:00 p.m., shares of Hindustan Petroleum Corporation Ltd (HPCL) traded 1 per cent higher at Rs 257.4 apiece.

Conversely, Indian Oil Corporation shares were down 1.02 per cent at Rs 89.99 apiece, and Bharat Petroleum Corporation (BPCL) shares were down 0.69 per cent at Rs 344.15 apiece.

Quick Service Restaurants' stocks (QSR) traded mixed. Individually at around 12:00 p.m., Coffee Day Enterprises was down over 1 per cent, Barbeque-Nation Hospitality was also down over 1 per cent, and Sapphire Foods India was down over half a per cent.

On the flip side, Devyani International shares were up nearly 2 per cent and Jubilant FoodWorks shares were up over half a per cent.

Note: A revision in commercial gas cylinders impacts the production cost of QSRs.

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