The Finance Minister blamed Ukraine’s war on disruptions to the supply chain, and said the unprecedented rise in global oil prices in “a few weeks” had led to the worst rise in record gasoline and diesel prices.
He also defended the fuel price hike after the state election and the four -month postponement of the price review, saying the unprecedented rise in global oil prices was a “few weeks” phenomenon that resulted in government -run fuel retailers. price increase.
Responding to the Budget 2022-23 debate at the Rajya Sabha, he said members of the opposition had stated that the war in Ukraine had long been raging, and fuel prices were being raised now.
“It’s not true at all,” he said. “The disruptions and consequences of rising global oil prices and supply disruptions have all happened over the last few weeks, and we are responding to them.”
The Finance Minister said the unprecedented rise in oil prices was a challenge.
Fuel rates remained stable for more than four months despite soaring crude oil prices. The rate review ended on March 22nd.
Overall, petrol and diesel prices have risen by ₹ 5.60 per liter each after eight rate revisions in the last nine days as of Wednesday, the worst increase since the daily price revision was implemented in June 2017.
Crude oil prices have risen since Russia invaded Ukraine on Feb. 24, with benchmark Brent crude hitting a multi -decade high of nearly $ 140 a barrel. Although crude oil prices have risen since then, they remain above the $ 100 level.
The last time the central government intervened was on November 4, 2021, on the eve of Diwali, when excise duties were cut on fuel nationwide, after petrol and diesel prices hit all-time highs of ₹ 110.04 and ₹ 98.42 per liter, respectively, in Delhi on November 3, after seven consecutive hikes.
Although fuel rates have been raised eight times in the past nine days, petrol and diesel prices in the capital are still below all -time highs reached in November last year.
Ms Sitharaman said the government was taking various measures in response to the rise in global oil prices.
PTI reported that he blamed the issuance of bonds by the United Progressive Alliance (UPA) government over a decade back to oil companies to make up for the losses they suffered for selling cars and cooking fuel below cost.
“Taxpayers today pay subsidies given to consumers more than a decade ago in the name of oil bonds. And they will continue to pay for the next five years as bond redemption continues till 2026,” he said, putting the redemption value at Rs 2 lakh crore.
To the opposition party’s claim that oil bonds were first issued by the Bharatiya Janata Party (BJP) government between 1999 and 2004, he said the Atal Bihari Vajpayee government had issued bonds worth Rs 9,000 crore compared to Rs 2 lakh crore by UPA.
International oil prices during the Vajpayee government were below $ 30 a barrel. At the same time, they soared to a record level of $ 147 under the UPA, requiring higher subsidy support in the form of oil bonds.
He said the oil bonds issued by the Vajpayee government were “a one -time action and not a continuous policy (as in the UPA).” “There is a huge difference in magnitude between Rs 9,000 crore which is one time to be repaid due to Vajpayee government oil bonds and more than Rs 2 lakh crore raised during the UPA which is getting paid now,” he said. said.
“Financing oil at a higher cost has an honest way of doing it and how you order it to other people and some other governments continue to pay for it. We don’t do it,” Ms Sitharaman said.
While the war in Ukraine has posed new challenges in the form of higher international oil prices and supply chain disruptions, he noted that inflation is under control.