Govt will now tax the windfall gains made by refineries

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Govt has just now announced export tax on diesel / petrol as refineries like reliance were making windfall gains

Reliance is down 6% on this news . This news prima facie may seem negative but is positive for the trajectory of local inflation as this move encourages more supply to the domestic facing industries.

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Govts action from last month n half clearly suggests that it is willing to make exports tough to encourage supply in domestic mrkts

Today govt also announced import duty hike of 5% on gold imports …which shows govt is getting worried about rising fiscal deficit n rupee depreciation

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Few days ago there were media reports that Reliance is pressurising Government to increase retail prices of petrol so that it too can follow suit. Instead of doing that, Government asked it to pay additional taxes. :grinning:
Still the opposition will cry that the Government works only for Ambani/Adani.

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I read in few articles that USA started this windfall gain on oil profits. I think India is following suit. Good decision as the local price of fuel might fall.

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Curbing exports will not help the fall in local price. There is no supply issue in our country. Its just that the exports made more money than local sales.

Two major outcome from this

  1. Govt. reveals its sadist mindset to punish whoever is making money/profit. It earlier applied to the steel sector as well
  2. Curb in exports may depreciate the currency further, note that the import was done at a lower cost, value added and exported at higher cost. Now that opportunity cease to exist, OMCs and exporters may wish to stop doing this rather than do at a low margin.
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GOI is short of money. The objective of this tax is not to curb export but to raise funds. Even USA/,UK are doing the same thing.

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If refineries in India export fuel outside then it hurts domestic prices. Same about crude especially when India imports bulk of its crude. So the taxation.

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Typical bull trapping by new channels. Yesterday at 3 pm flashed news about tax on gas…thereby cutting longs in Oil and gas companies and today morning exact opposite news is on the screen :joy:

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Yesterday sharp fat finger drop in GAIL around 3pm was more due to news that Russia defaulted on gas supplies to GAIL. Now Gail is running around to buy from alternative source in usa / middle east Africa etc. It will be much more expensive. Even going forward all LNG contracts from Gazaprom have been declared in defaut.
On a sympathy Ongc also fell.

Last Thursday there were rumors about govt reducing windfall tax. My impossible cnc sell orders got executed on a fat finger print. I bought it back.
Yesterday i had a low bid buy order on Gail which got executed at 3 pm. On mobile app notification only.i search why 6 ₹ drop. But i took a 2₹ profit in 5 mins & ran. Then found news about Russian gas supply default😌

Today as usual at 7.30am i placed amo cnc sell orders for Ongc & OIL. At 8.45am i saw the news in zerodha pulse( i dont watch tv. Only business news linked from kite mobile app fundamental tab or via zerodha pulse. ) Bloomberg news of reduction of windfall tax) then i changed amo & layered sell prices higher & up to limit up. I got out at good prices at day high before 9.30am.
But oil producers are not out of the woods yet .
But i have cushion to buy if they come down ( which they will)

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Double whammy for companies like Reliance and other refineries as…GRMs have crashed to below 1$ from above 30$ in June 2022.

That’s a massive massive crash of more than 90%

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