ONGC - up or down?


Well-Known Member
We are just 3 weeks from end of Q1. And oil prices have been averaging near $110 per barrel in this quarter.

So far there is no news of Windfall taxes. And because of the way things are structured in India - with Production Sharing Contracts, Cost recoveries, etc, it is difficult for government to pull off a Windfall tax.

Also, gas prices are set based on a formula and ONGC suffered for 6 years as the formula worked against it. Now, finally the formula is working for ONGC - and if government imposes Windfall tax, it will be entirely against the letter and spirit of the formula approach.

If there is no Windfall tax levied, ONGC is looking at a mountain of profits this quarter. And stock should go up significantly from here.

What do you think? Will there be a windfall tax?

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