Union Petroleum and Natural Gas Minister Hardeep Singh Puri on Wednesday said that the central government was “sensitive” towards the prices of petroleum products and was taking all possible steps to address the problem of rising fuel prices, reported PTI.
Addressing a press conference in Delhi, Puri said one of the measures taken by the government to mitigate the problem was mixing ethanol in fuel. He said that currently, about half the petrol sold in India had 10% ethanol. The government has planned to raise this to 20% for all petrol sold in the country.
The government’s initial deadline to increase the blending proportion to 20% was 2030. It has now been advanced to 2025, according to DNA.
Puri also suggested that state governments lower the prices of petrol and diesel. The minister was referring to Tamil Nadu, which on August 13 decided to reduce the price of petrol by Rs 3 per litre with a tax cut. Before the tax cut was announced, a litre of petrol in Chennai cost Rs 102.49.
“The Centre imposes an excise tax on petrol and diesel, while states impose VAT [Value-added Tax] on it,” the minister said. “We use this excise money to fund schemes like PM Garib Kalyan Yojana, under which 80 crore people received free foodgrains, PM Awas Yojana, [and] Ujjwala scheme.”
Puri also blamed the earlier United Progressive Alliance government for deregulating the prices of petrol and diesel in 2010, saying that the measure causes an impact on the local market when international rates of fuel change.
He also claimed that before 2014, the Congress government had issued oil bonds worth Rs 1.34 lakh crore to control the prices of petrol. Puri claimed that the Congress passed on this “problem” to the Bharatiya Janata Party government.
“They emptied the chest,” he claimed. “We have to pay Rs 20,000 crore this year for the oil bonds that have a maturity period of 15 years.”
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.
Meanwhile, the price of diesel has gone down by 19 to 21 paise across India, as of Wednesday, reported News18. Petrol rates, however, remain at a record high. In Mumbai, petrol prices remained at Rs 107.83 per litre, while diesel cost Rs 97.24 per litre, down by 21 paise. The petrol rate in Delhi was Rs 101.84 per litre and diesel was priced at Rs 89.67 a litre.
On Monday, Union Finance Minister Nirmala Sitharaman too had blamed the liabilities due to oil bonds issued by the previous United Progressive Alliance government for her inability to cut down the excise duty on petrol and diesel.
The government had to pay Rs 10,255 crore as interest on the bonds in 2014-’15 and has been paying Rs 9,989 crore under that head annually since 2015-’16, the finance minister said. Of the principal amount of Rs 1.34 lakh crore, only Rs 3,500 crore has been paid so far and the remaining is due for repayment between this financial year and 2025-’26, she added.
Congress spokesperson Randeep Singh Surjewala, however, said that oil bonds were not due for payment yet. “Till April 2021, payment made on Oil Bonds is Rs 3,500 crore only, yet [you] falsely hold UPA responsible!” Surjewala said in a tweet.