Reliance, ONGC Credit Quality to Weather India Tax, Moody’s Says
- Levies will reduce profits of some oil producers, exporters
- Moody’s expects that the government measures will be temporary
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Billionaire Mukesh Ambani’s Reliance Industries Ltd. and state-run Oil & Natural Gas Corp. are unlikely to suffer a “material” dent to their credit quality from India’s decision to levy additional taxes on local fuel exports and oil production given already elevated crude prices, Moody’s said.
“While profits generated from oil exports will fall because of windfall taxes, they will likely remain higher than the levels over April 2020 to March 2022 if refining margins are sustained at the highs seen in April to June this year,” wrote Moody’s analyst Hui Ting Sim in a note. “High crude oil prices will support the earnings of oil producers.”