Since Modi slid into the driver's seat, consumer fuel prices are "market-dictated" only on paper.
To ward off blow-back, BJP trolls peddle an Oil Bonds narrative to justify the world's worst oil & gas pricing/tax regime.
Do their 2 claims have any basis in fact? 🧵...
1. Who created Oil Bonds?
September 2000, Vajpayee-led NDA Govt's Petroleum Minister Ram Naik on fuel pricing regime:
"We have... a mixture of three options: adjustment of taxes & duties, issue bonds to control oil pool deficit & increase prices"...
zeenews.india.com/home/petro-pro…
In Sep 2001, Ram Naik & FM Yashwant Sinha discussed dismantling the Administered Pricing Mechanism in petroleum products. The main concern: Dealing with subsidy-fuelled deficits created by the crude price rise at the time...
tribuneindia.com/2001/20010923/…
Vajpayee's NDA govt worked out details over the next 3 months .
"We have decided to issue 7yr bonds at... the prevailing government security rate." - Ram Naik, Petroleum Minister, after a meeting with Yashwant Sinha, Dec 2001...
gulfnews.com/business/energ…
In Mar 2002, Ram Naik told Parliament that 80% of recognized dues in the oil pool would be replaced by bonds.
A CAG audit of claims & liabilities was begun. After its completion, the Govt would issue more bonds to liquidate existing & new dues...
Link: eparlib.nic.in/bitstream/1234…
On April Fool's Day 2002, the Vajpayee NDA Govt issued the first set of oil bonds worth 9000 Crore INR
BTW, issuing bonds is routine govt practice. Whether BJP/Vajpayee's Oil Bonds choice was fiscally prudent or not is a debate for another day. ...
Link: archive.pib.gov.in/archive/releas…
The Petroleum & Natural Gas Ministry's FY04 Annual Report, under BJP/NDA, reiterated that Union Govt would pay for subsidies that weren't eliminated yet.
Naturally, these would be handled by the same mechanism: oil bonds...
Page 82 of Report: mopng.gov.in/files/TableMan…
If NDA had won 2004 elections, they would have issued the remaining oil bonds. UPA won, & it had to continue this policy until subsidies were completely eliminated.
Today's BJP trolls don't know or conceal tht the BJP-led Govt, not UPA, conceptualized & implemented Oil Bonds...
2. Modi wants to give free fuel, but against his wishes, he has to collect excise of Rs 32.90/31.80 per litre of petrol/diesel to pay for oil bonds.
False. Not even Modi claims he'd like fuel to be free of course. As for the rest, @kaul_vivek analyzes...
vivekkaul.com/2021/06/17/pet…
Briefly, here are the total interest & principal payments that the Modi Govt made of all Oil Bonds since 2014 (FY22 included). Adds up to a paltry 82,940 Crore INR...
The Modi Govt raked in a whopping 19,30,830 Crore INR as fuel excise since 2014 (source: ppac.gov.in/WriteReadData/…)
Just ONE year's fuel excise duties (FY21) is 448% more than all the interest/principal the Modi govt will pay in EIGHT years (FY14-FY22)...
Let's say some excise is needed & take FY19 levels as reasonable. Modi Govt will extort an EXCESS of 1,07,801 Crore INR/year (> 3,23,402 Cr, FY20-22).
This uncannily equals the 1 Lakh Cr revenue shortfall due to Modi slashing Corporate taxes in FY20...
livemint.com/news/india/pan…
Oil Bond payments are a fraction of extra excise revenues. Modi gave corporates an annual 1 Lakh Crore gift, paid for by more excise from common citizens for fuel.
Don't forget the kicker: All goods/services costs rise due to high fuel cost; so GST revenues also increase.
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