Why Modi Govt Can’t Reduce Fuel Prices Now; Know Finance Minister’s Logic

New Delhi: Union Finance Minister Nirmala Sitharaman ruled out a reduction in fuel prices, blaming the previous Congress-led UPA government.

Prime Minister Manmohan Singh’s government had issued oil bonds — instruments in lieu of cash subsidy to oil marketing companies — that are up for redemption now.

Explaining why she is not in a position to cut excise duty on petrol and diesel for now, Sitharaman said: “If I had not incurred the UPA’s oil bonds worth over Rs 1.4 lakh crore, I would have given relief from petroleum prices… I can’t go by the trickery that was played by the previous government.”

In the last 5 years, the BJP government has had to pay Rs 70,195.72 crore in interest on oil bonds, Sitharaman informed on Monday.

“We’ll still have to pay interest of Rs 37,000 crore by 2026. Despite interest payments, principal outstanding is over Rs 1.30 lakh crore,” said the Finance Minister.

She suggested that the Centre and states should sit down to find a way forward to resolve the problem of high petroleum prices.

The Congress, however, denied Sitharaman’s charge.

Amitabh Dubey, president of Professionals Congress’ Delhi chapter, pointed out that Modi’s government had increased fuel prices by Rs 7 per litre in a six-week period between May and June alone.