Budget Analysis: Will incremental cess hurt ONGC, Oil India?

Moneycontrol Bureau

Analysts are concerned about the 80% incremental cess which will be levied on crude as announced in the Union Budget 2012-13. Upstream companies like ONGC, Oil India and Cairn India which are involved in exploration and production activities have a reason to worry as their toplines will be impacted with this move.

Currently, these companies which collectively produce 40 million metric tonnes of crude will have to pay Rs 4,500 on each metric tonne output from Rs 2,500 which they pay at present.

As the Finance Minister announced the increase in cess on Friday, shares of upstream companies tumbled anything between 4%-6% making it evident that investors were highly disappointed.

Find out how this levy will hurt upstream companies?

ONGC

The company contributed 79% of India