No cut in excise duty on petrol, diesel for now; have to pay for past oil bonds: FM Sitharaman

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Finance Minister Nirmala Sitharaman on Monday said that there will be no cut in excise duty on fuel as of now. She said the previous UPA government had reduced fuel prices by issuing Oil Bonds of 1.44 lakh crores. 

“I can’t go by the trickery that was played by previous the 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,” she added.

The UPA government had issued bonds to state-owned oil companies to make up for the difference in the artificially suppressed retail selling price of fuel and the cost. These oil bonds and the interest thereon are being paid now.

The finance minister said that exchequer is burdened by interest payments being made for oil bonds floated by the Congress-led UPA government. The government has paid over 62,000 crores in interest in the last 5 years on oil bonds itself.

“We’ll still have to pay interest of 37,000 crores by 2026. Despite interest payments, 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,” Sitharaman said.

“People are right to be concerned. Unless the Centre and states discuss a way out, there is no solution possible to this…There will be no cut in excise duty on fuel as of now,” the finance minister said.

Fuel prices are at record high in the country and the opposition leaders have been demanding the Centre to cut down taxes to bring down petrol and diesel cost, which has crossed 100-mark in some states.

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