Reliance Shares Decline 4.6% Amid Windfall Tax Reintroduction as Oil Prices Surge

Reliance Industries Ltd. Share Price Plummets 4.60% Amidst Windfall Tax Reintroduction

On Friday, 27 March, shares of Reliance Industries Ltd. (RIL) experienced a significant drop of 4.60% to a day's low of ₹1,348 per share, marking the company's largest single-day sell-off since June 2024. This decline resulted in a market capitalisation loss of nearly ₹80,000 crore.

The sell-off in RIL's stock was triggered by the government's reintroduction of windfall taxes on diesel and aviation turbine fuel (ATF) exports. To mitigate the impact of rising crude oil prices, driven by the ongoing US-Israel-Iran conflict, the government reduced excise duties on fuels, lowering petrol duty to ₹3 per litre and eliminating it on diesel. However, the reintroduction of the windfall tax, with a diesel export tax of ₹21.5 per litre and a ₹29.5 per litre tax on aviation fuel exports, is likely to impact RIL, as it is the country's largest fuel exporter.

Reliance Industries produces nearly 5 million tonnes of ATF at its twin refineries in Jamnagar, accounting for about one-fourth of India's total ATF output.

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The company has denied purchasing crude oil of Iranian origin, calling recent media reports "baseless" and misleading. The government has also decided to absorb the cost pressure of rising crude oil prices, which could result in a revenue loss of ₹70 billion, with a net impact estimated at ₹55 billion per fortnight.

Year-to-date, Reliance Industries share price has fallen 14.16%, bringing its market capitalisation to ₹18,23,844 crore, down by nearly ₹3,00,000 crore from ₹21,24,210 crore. The decline has impacted the company's shareholders and weighed heavily on the Nifty 50.