The Finance Minister gave her official statement on Monday after the increasing rates of petrol and diesel worried the end-users. The minister said that the current government is unable to alter the threshold prices of the oil due to the oil bond signed by the UPA government that imposes a ₹10,000 Cr interest every year.
The minister also added that if the bond hasn’t been into existence then we would’ve reduced the heavy excise duty rates paid by people. “There will be no cut in excise duty on fuel as of now. Exchequer is burdened by interest payments being made for oil bonds floated by UPA Govt. The Govt has paid over 62,000 crores in interest in the last 5 years on oil bonds itself”, Finance Minister Nirmala Sitharaman said.
We’ll still have to pay interest of Rs 37,000 crores by 2026. Despite interest payments, a principal outstanding of over 1.30 lakh crores is still pending. If I didn’t have the burden of oil bonds, I would have been in a position to reduce excise duty on fuel: Finance Minister.
The oil bonds were issued by the UPA government to safeguard customers and domestic businesses from the caprice of the global market for crude oil. However, subsidies were curtailed down after some time leading to higher excise duty rates.