ONGC led oil drillers and refineries on a demand wave on October 3 after crude oil prices climbed and the government slashed windfall tax on production and diesel exports. ONGC, India's largest oil marketing company, was trading up 4 percent around 12.50 pm.
Oil prices in the international market jumped more than 3 percent in early Asian trade on Monday, as OPEC+, which is a group of oil producing nations, weighed output cuts by more than 1 million barrels a day for its biggest reduction since the pandemic, in a bid to support the market.
Brent crude futures rebounded $2.51, or 3 percent, to $87.65 a barrel by 0206 GMT, after settling down 0.6 percent on Friday. US West Texas Intermediate crude was also up 3 percent, or $2.39, at $81.88 a barrel, after the previous session's loss of 2.1 percent.
India on Sunday slashed the windfall tax on domestically produced crude oil to Rs 8,000 per tonne from Rs 10,500 in the face of the prevailing downslide in global oil prices. It also scrapped the export tax on jet fuel and halved export duties on diesel to Rs 5 a litre. The developments mean higher revenue for upstream as well as downstream companies.
ONGC, which drills oil well, was up over 5 percent at Rs 133.50, Oil India was up 3 percent at 179, while Indian Oil, Bharat Petroleum, Hindustan Petroleum and Reliance Industries were trading in green with up to 1 percent gains.
The momentum was also because prices of natural gas were hiked by a steep 40 percent to record levels, in step with the global firming up of energy rates. Natural gas is used to generate electricity, make fertilizers and is converted into CNG to run automobiles. Hence, all companies involved in these sectors are set to feel the cost pressure.
Oil stocks came under pressure recently because of falling crude oil prices and relatively higher taxes compared to last year.
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