Oil & gas stocks tumbled sharply on reports the government may impose a special oil tax on the domestic crude oil production under the New Exploration Licensing Policy.
Essar Oil (down 9.06% at Rs 168.55), Cairn India (down 8.87% at Rs 202), and Reliance Industries (down 4.47% at Rs 1,845), were the top private sector oil firms that slumped.
India's largest state-run oil explorer by market capitalisation ONGC slipped 5.47% at Rs 966.90.
According to reports, the proposed tax is supposed to kick-in after price of domestically-produced crude oil crosses the $75/barrel mark. While public sector oil producers like ONGC and Oil India would have to fork out to the government 100% of additional realisation beyond the cut-off price, private companies like Reliance Industries (RIL), Essar Oil and Cairn India would be required to pay 40% of their windfall gains.
The BSE Oil & Gas index underperformed the Sensex in last one month till 12 September, falling 12.70% as against Sensex's 7.96% fall. The BSE Oil & Gas index also underperformed the Sensex in past three months declining 8.61% as against Sensex's 8.19% fall.
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