FM gives no hope on fuel duty cut

Finance minister Nirmala Sitharaman on Monday remained non-committal on any excise duty cut on petrol and diesel, saying payments in lieu of subsidised in the past fuel pose limitations.

Petrol, diesel, cooking gas and kerosene were sold at subsidised rates during the previous UPA government and to compensate for the rise in crude prices that crossed $100 per barrel then, the government issued oil bonds worth Rs 1.34 lakh crore to the staterun fuel retailers. These oil bonds and the interest on them are being paid now.

"If I did not have the burden to service the oil bonds, I would have been in a position to reduce excise duty on fuel," she told reporters here.

Sitharaman, who had raised excise duty on petrol and diesel to record high to shore up revenue collections last year, said the interest on oil bonds paid in the last seven years totalled Rs 70,195.72 crore.

Of the Rs 1.34 lakh crore of oil bonds, only Rs 3,500 crore of principal has been paid and the remaining Rs 1.3 lakh crore is due for repayment between this fiscal and 2025-26, she said.

The government has to repay Rs 10,000 crore this fiscal year (2021-22). Another Rs 31,150 crore is due to be repaid in 2023-24, Rs 52,860.17 crore in the following year and Rs 36,913 crore in 2025-26.

The finance minister also said she expects inflation to remain in the prescribed range, 4 per cent plus or minus 2 per cent, during the current fiscal.

She expressed confidence that revenue would be buoyant in the coming months. GST and direct taxes have improved in the past few months, she said.