Share price of ONGC (Oil and Natural Gas Corporation) fell as much as 11.95 percent to Rs 157.30 per share after PTI reported that the government may levy a windfall tax on oil producers to permanently moderate petrol and diesel prices.

According to the PTI report, the tax may kick in as a cess when international fuel prices cross $70 per barrel.

Domestic oil producers like ONGC make a profit by selling their produce at international rates. This profit may now hurt when international crude oil rates go beyond the $70 a barrel threshold.

The report also said, "The revenue so collected would be used to pay fuel retailers such as Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd., and Bharat Petroleum Corporation Ltd. to help them absorb spikes beyond the threshold levels."

A minor reduction in excise duty by the central government may be made to give immediate relief to consumers. Additionally, the state governments will be asked to lower sales tax and VAT (value added tax) to make a visible impact.

Developed countries like the UK reportedly impose windfall taxes on North Sea oil and gas profits and had raised it to $75 per barrel in 2011.

The PTI report said that the Indian government is looking at this as one of the options to bring a permanent solution to the problem of rising oil prices.

Petrol and Diesel were hiked for the eleventh day today to recover the losses from a 19-day pause in daily revision before the Karnataka assembly poll. Also Read: Petrol And Diesel Price Rise For Eleven Consecutive Days Hint At Imminent Crisis