Shares of firms related to oil exploration and refineries were in heavy demand on Wednesday, with Reliance Industries and ONGC rallying after the government slashed windfall tax on petrol, diesel, jet fuel and crude oil.

Reliance Industries shares jumped 4.25 per cent to Rs 2,545.05 on the BSE.

Oil and Natural Gas Corporation (ONGC) rallied 7 per cent to Rs 136.40.

Among others, Chennai Petroleum Corporation jumped 11.38 per cent, Oil India climbed 8.82 per cent and Mangalore Refinery and Petrochemicals advanced 4.95 per cent.

"The relief announced by the government for the petroleum sector through reduction in windfall tax and cuts in duties on exports will be a major boost for the sector, particularly for RIL," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

In the equity market, the 30-share BSE Sensex was trading 714.52 points or 1.30 per cent higher at 55,482.14.

The government on Wednesday slashed the windfall tax on petrol, diesel, jet fuel and crude oil following a decline in international rates.

It scrapped a Rs 6 a litre tax on export of petrol and reduced the same on ATF from Rs 6 a litre to Rs 4. Besides, the tax on diesel has been reduced to Rs 11 from Rs 13 per litre, according to finance ministry notifications.

Further, the Rs 23,250 per tonne additional tax on crude oil produced domestically has been cut to Rs 17,000 per tonne.