UPA-era oil bonds the ‘culprit’ behind fuel price hike: Karnataka CM
Current govt at Centre is saddled with interest payments on bonds to OMCs: Bommai
BENGALURU:
Chief Minister Basavaraj Bommai on Thursday said the hike in fuel prices is not linked solely to global crude prices. An important factor is the interest being paid on bonds that were issued by the earlier Congress-led UPA government to OMCs to keep prices down.
Speaking to the media at Hubballi, he said, “They (Congress) know this. They have run the government previously. During their rule too, fuel prices had peaked. Among the factors that affect fuel prices are the financial status of oil companies. We all know the UPA issued oil bonds.” The CM said the present government is saddled with paying interest on these bonds.
Instead of paying OMCs a subsidy upfront, the UPA government had kept fuel prices artificially low by issuing oil bonds to the oil companies. The government was obliged to pay interest on the bonds, but had not paid all the dues so as to keep the fiscal deficit in check, the CM said.
Bommai noted that bonds to the tune of Rs 1.44 lakh crore had been issued to OMCs between 2005 and 2012. He said he would discuss the issue with Union Finance Minister Nirmala Sitharaman when she visits Bengaluru on September 5.
Cong’s take
Meanwhile, Congress leader Siddaramaiah blamed the Modi government for raising the price of LPG every month, as well as for the hike in petrol and diesel prices. “In 2014, Rs 410 was the price of a cylinder when the UPA left office. Today it is Rs 885, a rise of 116 per cent. Petrol was Rs 71.5 per litre in 2014, today it’s Rs 101 per litre, a rise of 42 per cent. Diesel was priced at Rs 57 per litre in 2014, it’s Rs 88 per litre today,” he said.
The Congress has been insisting that fuel and LPG prices be reduced by removing some taxes.
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