Shares of state-run OMCs or oil marketing companies have been rallying in Tuesday's trade after the Central Government slashed the windfall tax on domestically produced crude oil on the back of falling global crude oil prices. The OMCs include Reliance Industries (RIL), Hindustan Petroleum Corp Ltd (HPCL), Bharat Petroleum Corp Ltd (BPCL), Indian Oil Corp Ltd (IOCL), among others.

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The government has revised the windfall tax on domestically produced crude oil to Rs 4,100 per tonne from Rs 6,400 per tonne earlier. The new changes will be effective from today, May 2.

The government has left the windfall tax on petrol, diesel and aviation turbine fuel at zero. The windfall tax rates are revised every fortnight based on global crude oil prices.

India imposed the windfall taxes on July 1, joining a growing number of countries placing windfall levies to tap energy companies’ booming profits.

RIL, ONGC shares in the green

In the sector pack BSE oil and gas, shares of RIL, ONGC, Indian Oil, GAIL, Hindustan Petroleum, BPCL were in the green.

Shares of the country's most valued company, Reliance Industries advanced 0.69 percent to Rs 2,437 on the BSE, while Oil and Natural Gas Corporation (ONGC) shares were trading 2.39 percent at Rs 162.75 per equity share.

"One can accumulate Reliance Industries in the range of Rs 2,415-2,425 for an upside target of Rs 2,500 and the stop loss would be Rs 2,350 on a daily close basis," said Jigar S Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers

On Tuesday, shares of BPCL were 1.15 percent higher at Rs 361.70 apiece, HPCL at Rs 254.85 per share, up 1.43 percent, while the stock of Indian Oil Corporation Ltd was trading 1.14 percent higher at Rs 82.30 apiece.

Meanwhile, Sensex and Nifty advanced today, aided by broad-based gains across sectors, driven by March-quarter earnings, as investors await the interest rate decision by the US Federal Reserve on Wednesday.

The Nifty 50 was up 0.49 percent to 18,153.10 as of 9:51 am, while the S&P BSE Sensex rose 0.45 percent. The benchmark Nifty 50 index gained more than 4 percent in April, its best month since November last year. The index, which gained 2.5 percent last week, moved into overbought territory for the first time in nearly five months on Friday.

"Every dip can be a buying opportunity until the Nifty closes below 17,820 levels,” said Deven Mehata, equity research analyst at Choice Broking.

First Published:May 2, 2023 10:59 AM IST