'Main reason behind petrol price hike...' oil minister Dharmendra Pradhan explains
The minister launched an attack on the former Prime Minister Manmohan Singh-led UPA regime, stating that the previous government had left oil bonds worth crores for repayment
As fuel prices continue to dent the pockets of all consumers, Dharmendra Pradhan, the Union minister of petroleum and natural gas, has reiterated that the upward trajectory witnessed by petrol is due to global crude prices.
What are oil bonds?
These are long-term special securities issued by the government in place of a cash subsidy. Oil companies are paid interest through it, typically over a term of 15-20 years.
They are issued if the government is in danger of breaching the fiscal deficit target and aims to delay the fiscal burden of such a payout to future years.
Petrol and diesel were being sold at lower than the international market price before the complete deregulation of rates.
To compensate for this, the UPA government issued oil bonds to the companies amounting to ₹1.4 lakh crore between 2005 and 2010.
About ₹10,000 crore worth of bonds will mature this year. Interest payment on oil bonds annually over the last decade has been around ₹10,000 crore rupee. But bond redemption so far has been just ₹3,500 crore in the last seven years.
According to experts, the central government’s income from taxes and surcharges on petrol and diesel topped ₹3 lakh crore in FY21.
Petrol prices today
According to a price notification by state-owned fuel retailers, a litre of petrol is retailing at ₹97.50 in Delhi today, while diesel priced at ₹88.23.
In Mumbai, the petrol price hit an all-time high of ₹103.63 a litre. Diesel now costs at ₹95.72 per litre in the financial capital of the country.
The price of petrol was ₹98.65 per litre and that of diesel was ₹92.83 per litre in Chennai.
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