Finance minister rules out excise duty cut on fuel prices, blames UPA-era oil bonds

Finance Minister Nirmala Sitharaman on Monday ruled out a cut in excise duty on petrol and diesel, PTI reported. She blamed liabilities due to oil bonds issued by the previous Congress-led United Progressive Alliance government for her inability to do so.

“A significant amount is going for interest payment and principal repayment…What unfair burden on me,” Sitharaman told reporters. “…Even if I want to do something I am paying through my nose for the oil bonds.”

Oil bonds are a kind of special securities issued by the government of India to public entities like oil marketing companies, Food Corporation of India and fertiliser companies in lieu of cash subsidies, according to a Reserve Bank of India report.

Sitharaman’s comments on Monday came as petrol and diesel prices have remained unchanged since hitting a record on July 17. Petrol prices breached the Rs 100 per litre-mark in several cities as state-owned oil firms increased fuel prices on 41 occasions since May 4.

On Monday, Sitharaman told reporters that in the financial year 2014-’15, when the Modi government took over, the opening balance of bonds issued by the United Progressive Alliance government under former Prime Minister Manmohan Singh was about Rs 1.34 lakh crore.

The government had to pay Rs 10,255 crore as interest…

Read more