The petrol and diesel rates in India have not been revised by OMCs for a one month now, and over half of the nation has petrol crossing rupees 100-a-litre mark.
Nirmala Sitharaman who is the Finance Minister of India, had clearly stated that there will be no cut in excise duty on fuel as of now, as the government has to pay for the dated oil bonds that issued by the UPA government.
FM Sitharaman while blaming the previous Manmohan Singh-led UPA government said, “I can’t go by the trickery that was played by the previous UPA government. Due to oil bonds, the burden has come to our government, that’s why we are unable to reduce prices of petrol and diesel.”
The last government had issued oil bonds worth rupees 1.34 lakh crore to the OMCs, out of which only rupees 3,500 crore of principal had been paid.
FM said that for the next six years, the union government has a total debt obligation of worth rupees 1.30 lakh crore.
Nirmala Sitharaman said that the union government has paid over rupees 70,195 crore in interest on these bonds in the last seven years.
The government has to repay rupees 10 thousand crore in the current fiscal year, another rupees 31,150 crore in FY 2023-24, followed by rupees 52,860 crore in FY 2024-25 and rupees 36,913 crore in 2025-26.
She said, “A significant amount is going for interest payment and principal repayment. What an unfair burden on me.”
The dated oil bonds were issued in lieu of cash subsidy to OMCs in former Prime Minister Manmohan Singh’s UPA rule, and also Atal Bihari Vajpayee’s NDA era.
These oil bonds were issued in favour of oil companies such as Indian Oil Corporation, HPCL and BPCL, and being the issuer,vthe union government would bear the interest payments and redemption at maturity.
The central government has a liability to pay rupees 20 thousand crore in the current FY 2021-22 in the form of bond repayment and interest on the outstanding oil bonds.