Connect with us

Hi, what are you looking for?

Share Market

No respite from high petrol, diesel prices; FM Sitharaman blames Rs 1.3 lakh cr UPA oil bonds for high taxes

Financial Express - Business News, Stock Market News

petrol, diesel, oil prices, commoditiesThe previous government had issued oil bonds worth Rs 1.34 lakh crore to the OMCs, of which only Rs 3,500 crore of principal had been paid.

Even as petrol and diesel prices in India have not been revised by OMCs for the last one month, more than half the country has petrol at over Rs 100-a-litre mark. Finance Minister Nirmala Sitharaman clearly stated that there will be no cut in excise duty on fuel as of now, saying the government has to pay for the oil bonds issued by the UPA government in the past. “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,” FM Sitharaman said, blaming the previous Manmohan Singh-led UPA government.

The previous government had issued oil bonds worth Rs 1.34 lakh crore to the OMCs, of which only Rs 3,500 crore of principal had been paid. While for the next six years, the government has a total debt obligation worth Rs 1.30 lakh crore. FM Sitharaman said that the government has paid over Rs 70,195.72 crore in interest on these bonds in the last seven years.

The government has to repay Rs 10,000 crore in the current fiscal year, another Rs 31,150 crore in 2023-24, Rs 52,860.17 crore in the following year and Rs 36,913 crore in 2025-26. “A significant amount is going for interest payment and principal repayment. What an unfair burden on me,” FM said.

What are oil bonds?

Oil bonds were issued in lieu of cash subsidy to oil marketing companies (OMCs) in former Prime Minister Manmohan Singh’s UPA era, and also Atal Bihari Vajpayee’s NDA rule. These sovereign oil bonds, issued in favour of oil companies Indian Oil Corporation, HPCL and BPCL, were transferable, allowing these companies to raise immediate cash at the time. The government, being the issuer, would bear the interest payments and redemption at maturity. The government has a liability to pay Rs 20,000 crore in the current fiscal year 2021-22 in the form of bond repayment and interest on the outstanding oil bonds.

Also read: Why govt is not cutting petrol, diesel prices; Rs 1.3 lakh cr oil bond repayments due for cheap fuel in past

Meanwhile, the government’s tax collections on petrol and diesel surged 88 per cent to Rs 3.35 lakh crore in the year to March 31, 2021, from Rs 1.78 lakh crore a year back. Excise collection in pre-pandemic 2018-19 was Rs 2.13 lakh crore.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Click to comment

Leave a Reply

Your email address will not be published.

You May Also Like


Cybercriminals Adopt the Blockchain to Broadcast confidential Messages A group of analysts from SophosLabs represents that programmers working the crypto-jacking malware, Glupteba, have been...


PUBG unban in India soon as PUBG Corp. Will The Government Of India Unban PUBG? PUBG Mobile was Ban in India, PUBG organization has...


A standard method to execute Bitcoin could be powerless against double-spending, the new examination has found. Blockchain sleuths at ZenGo, a wallet startup, have...

BlockChain News

HDD mining, also known as “storage mining”, is a process of obtaining cryptocurrency based on hard disk memory. Compared with traditional POW mining, hard...