Referring to the oil bonds, Nirmala Sitharaman said that we are bearing the weight of the decisions of the previous government.
Finance Minister Nirmala Sitharaman has given a big statement regarding the prices of petrol and diesel. He has blamed the previous government i.e. UPA government for the expensive fuel. Talking about this, Nirmala Sitharaman said, “We are bearing the weight of the decisions of the previous government.” At the same time, he ruled out the possibility of a fall in the prices of petrol and diesel in the near future and informed that the excise duty on petrol and diesel is not likely to come down.
Finance Minister Nirmala Sitharaman said that the central government has paid Rs 70,196 crore in interest on oil bonds in the last five years. The UPA government raised funds by issuing oil bonds during 2005-2009. As a result, despite the financial crisis in 2008, fuel prices did not increase. The UPA government announced oil bonds and borrowed from Oil Marketing Companies (OMCs). The present government is finding it difficult to pay it.
This statement of the central government has come at a time when the Tamil Nadu government has cut fuel tax by Rs. In such a situation, after the announcement, the state government will suffer a loss of Rs 1,160 crore every year.
Let us tell you that the base price of petrol in the country is Rs 41 and that of diesel is Rs 42. Due to the tax imposed by the central and state governments, its price has crossed Rs 110 in many parts of the country. The central government levies an excise duty of Rs 33 on petrol and Rs 32 on diesel. After which the state government imposes VAT and Cess on it in its own way. Due to this, the price of petrol and diesel increases by 2 times more than the base price. The country charges more than Rs 56 per liter on petrol and Rs 45 per liter on diesel. In such a situation, the price of petrol has crossed Rs 100 and the price of diesel has crossed Rs 90 in many cities of the country. However, ever since Hardeep Singh Puri became the new petroleum minister, prices have remained stable. There has been no increase or fall in prices for 29 consecutive days since July 18. Petrol is being sold at Rs 101.84 per liter and diesel at Rs 89.97 per liter at IOC pumps in Delhi.
What are oil bonds?
From 2005 to 2009, the central government issued oil bonds worth Rs 4 lakh crore. Issuance of oil bonds means not to pay cash on purchase of any goods, but to write on a letter that full price including interest will be paid in future. Due to which the government has the advantage that they do not have to pay immediately. These bonds were issued for a specific period. At that time fuel was subsidized. However, whatever be the rate in the global market, the government will decide it in its own way. When the situation of oil companies worsened in the 2008 global recession, they started demanding a lawsuit from the government instead of oil bonds. After which the oil bond payment system was discontinued in 2010. For information, let us tell you that the bonds issued between 2005 and 2009 are expiring between 2022 and 2026.