Oil stocks feel the pinch after government raises windfall tax on crude; ONGC, Oil India, Indian Oil fall up to 2.5%

Shares of upstream oil companies Oil and Natural Gas Corp and Oil India Ltd fell as much as 2.5 percent on April 4, after the government increased the windfall tax on crude oil by a massive 40 percent. Shares of downstream oil companies Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corp Ltd (BPCL), and Hindustan Petroleum Corp Ltd (HPCL) fell too.

In the late afternoon trade, ONGC stock was down 2.1 percent at Rs 269; Oil India was down 2.1 percent at Rs 622; Indian Oil was down 2.3 percent at Rs 170; BPCL was down 2 percent at Rs 599; and HPCL was down 2.7 percent at Rs 462.

The Government of India announced late last nigh a hike in the windfall tax on crude petroleum from Rs 4,900 per tonne to Rs 6,800 per tonne.

This move by the Indian government comes as global oil prices continue to rise amid concerns over potential disruptions in supply due to escalating geopolitical tensions. The government levies a windfall tax on local crude oil production companies when the global market prices are above $75 per barrel.