Now, the prices of petrol and diesel have gone up so much that people are suffering terribly. On top of it, the LPG cylinder is also getting expensive. And perhaps the most irritating thing is that after every month or two, the Government and its pliable media, come up with new excuses for why it is happening. First, they said that it was because of an Act of God that they had to raise the prices of petrol and diesel. At times they say that if you want cheaper petrol and diesel you should move to Afghanistan. Or Pakistan. “You’re talking about petrol, so go to Taliban. See how it is in Afghanistan. -We’re talking about our country.-Petrol costs ₹50 there.” Now there is a new excuse in the market, Oil Bonds.That because the Oil Bonds from the Congress era are being repaid now, that’s why you have to pay more for petrol. Basically, Congress is at fault. “You will be shocked to know that for the rising prices of petrol and diesel the Modi government is not responsible rather the Manmohan Singh government is responsible.” “They left us millions of rupees in debt due to the Oil Bonds.” During their tenure, they bought Oil Bondsworth ₹1,400 billion.” let’s understand what these Oil Bonds are exactly. And how much can they be blamed for the rising fuel prices? The conclusion that we arrived at was that broadly speaking, the price of petrol depends on two things in India.
First, the price of Crude Oil in the international markets. Second, the taxes levied on petrol and diesel by the government. Obviously, if either of these two rises, the prices of petrol and diesel will also rise. In the last 7 years, if we compare the international price of crude oil from 2014, it has actually fallen. It has decreased because of the fall in demand for oil due to the coronavirus.
HOW MUCH TAX ON FUEL
That’s why the price of crude oil has decreased. But the Excise Duty levied by the Central Government has increased rapidly in the last 7 years. In 2014, the Excise duty on petrolused to be around ₹9.50 per litre. Now, in 2021, this Excise duty is almost ₹33 per litre. An increase of almost 3.5 times. It is scarier for diesel, at an increase of almost 9 times. In 2014, the Excise duty used to be around ₹3.50 per litre. Now it’s almost at ₹32 per litre. This is something that the government can’t hide. The government can’t lie that the Excise duty hasn’t increased at all. These clear cut numbers are available to the public. When people questioned the government’s reluctance to bring petrol and diesel under GST, then the government had to admit this. The government said that they do not plan to bring petrol and diesel under GST. “In this House, I’d like to make it known that it is not possible in the next 8 to 10 years, to bring petrol and diesel under GST.” Then our Finance Minister and the pliable minister have come up with a new funda for why the taxes can’t be reduced.
The Oil Bond commitments from the Congress’ tenure. What are these Oil Bonds? Friends, you can think of a Bond as something like a loan, that is issued by the government or a company, to raise money. But there are some important differences between a Bond and a loan. Generally, loans are given by a bank, to an individual or a company. But generally, bonds are issued by the government. The government takes money from others and issues bonds against it. And because the government is borrowing money often, the government has to pay interest on it. But there are some bonds on which interest does not have to be paid. Another important difference is that loans are generally fixed in terms of how much you’ve taken as a loanand how much you need to repay. But on the other hand, the price of the Bonds may fluctuate. Bonds can be traded in. Similar to the fluctuations in the stock prices, the prices of bonds can also fluctuate. But we do not need to go into the technicalities, to understand today’s video. Because you’d understand better through examples. The thing is, even during Congress’ tenure, around 2012 – 2013, the prices of petrol and diesel were increasing rapidly. Then many people had protested.
The opposition parties had protested. “The way that they have increased the price of petrol in the country, is the live example of the administrative incompetency of the Delhi government.” Many opposition leaders took to the roads. Several rode on bullock carts, while many were protesting with posters. Many people were riding bicycles. Even the celebrities spoke out against this openly like Akshay Kumar, Anupam Kher tweeting about the petrol price. Amitabh Bachchan tweeting about the petrol price. “Why have the Prime Minister’s Office and the Congress government increased the price of petrol and diesel 17-18 times?” And all of it was justified. Because petrol is not a luxury commodity. Petrol and diesel are things that the common people use. It is one of the basic necessities of people. The public uproar regarding the prices of petrol at the time, was not wrong, in my opinion. And because of this pressure by the media, opposition leaders, celebrities and people, the Congress Party was forced to listen to the people.
They decided to try to keep the petrol prices low. How could the petrol prices be reduced? First, by reducing the tax. The government reduced the excise duty. But that can be done only to an extent. If it was reduced beyond the extent, the government would face a huge revenue loss. So the Congress party reduced the excise duty, but the prices were still high after it. The pressure from the people was also high. The next option was to give subsidies to the oil companies. Meaning that the government would literally pay the oil companies so that they can keep the price low. But the problem was that the government had to have enough money to give subsidies to the oil companies. What could be done if the government did not have money, to give subsidies to the oil companies? Then comes our third option. To issue oil bonds to the oil companies.
OIL BOND COMPANIES
The government is basically telling the oil companies to take the bond that they do not have the money to pay as subsidies. so the bond is given as a coupon, as a commitment that after some years, they would pay them money when the companies would return the bonds. Similar to the coupons codes on food delivery apps, that you can redeem later to get some discounts in terms of money. These oil companies had these Oil Bonds. The government is committing that in 2025, the government will pay such and such money to the oil companies. The bonds are issued against it. Plus, the government will also pay some interest. An interesting fact here. The Congress government was not the first government to issue Oil Bonds. This was done for the first time in 2002, under the NDA Atal Bihari Vajpayee’s government. They had issued Oil Bonds of about ₹90 billion to the oil companies.
ROLE OF GOVERNMENT IN OIL BONDS
The only difference was that later when the Congress government was formed, they did not raise a commotion about these oil bonds. They settled these Oil Bonds, and later issued Oil Bonds themselves. It was around 2008, there were conflicts in the Middle Eastern countries. Because of this, the price of crude oil rose to about $147 per barrel. It is now around $70 per barrel. Look at the vast difference. It was more than twice what it is today. 2008 was the year when there was a terrible economic recession worldwide. During this time, the Manmohan Singh government decided that the common man should not be overburdened. That the prices of petrol and diesel should be under control. This was the time when the Manmohan Singh government issued the Oil Bonds. It is true that since 2014, since Narendra Modi led BJP government has come into power, they have been settling the old Oil Bonds.
They’ve been paying the amount to the companies. In instalments. Till here, BJP’s narrative is true. But their lies are hidden in the numbers. How much are they paying for the Oil Bonds? From 2005 to 2012, Oil Bonds worth ₹1,440 billion were issued by the Indian government to the OMCs. After BJP came into power in 2014, ₹1,340 billion was still due. In 2015, two bonds matured. But their total amount was only ₹35 billion. And the remaining amount is still approx ₹1,310 billion. This amount is still to be paid by the Narendra Modi government to the oil companies. But since then, no oil bond has reached its maturity date. The maturity date is basically the date on which the money would be repaid to the oil companies, as per the commitment. So if no other oil bond has reached maturity date, the government hasn’t had to repay any bonds since 2015. Although, the interest is needed to be paid. And the interest is around ₹100 billion per year.
Since 2015, every year this government has had to bear the burden of ₹100 billion per year for paying the interest. But this year, the burden will increase because two bonds will mature in October and November that will have a total amount of ₹100 billion. So this year, the burden will be around ₹200 billion. You may wonder how do I know all this information. All this information is publicly available, friends. On the government’s website. I will link to the website in the description below. This is a pdf. You can clearly see the two bonds that will mature this year. It’s written on top. After this, the next maturity period will be near the end of 2023, with a total amount of ₹311.5 billion. Apart from these, the rest of the oil bonds will mature after the 2024 elections. So this government will not have to make any further payments before that.
EARNING OF THE GOVERNMENT THROUGH THE TAXES
Now let’s look at the data of how much the government earns through the taxes. Let’s look at only the amount of Excise duty collected by the Central Government. Because we’re talking about the taxes of the Central Government only. The government had come forward with an amount when the question was raised in the Parliament. A related pdf is also available on their website. The link will be in the description in case you want to confirm it yourself. You’d see that within a year, in the year 2015 – 2016, the government had earned ₹1,540 billion from the excise duty on petrol and diesel. Meaning that, with the revenue of only this year, all the oil bonds could be paid off. Even those that have not matured. As I said, the due was around ₹1,344 billion. And still, some money would’ve been left over.
And this is the tax collection of only 1 year. By 2021, the government had heavily increased the Excise duty. As I told you earlier in the video. So obviously, the tax collection of the government would have increased as well. By how much? You’d be shocked to know the number. It is at ₹3,350 billion. This amount has been earned by the government in only 1 year. In the last Financial Year. In the Financial Year of 2020-2021. Only from the Excise duty on petrol and diesel. Imagine; this is such a huge amount that all the Congress’ era oil bonds that the government has to repay, can be repaid from the revenue of only this year. After which, ₹2,000 billion will be left with the government. That the government can use for other things. And then they try to pin the blame on Congress. for the high petrol prices now.
HOW GOVERNMENT FOOLING YOU ?
I’ve clearly presented all the facts to you. So hopefully, you’d understand how they are looting you first, and then fooling you. But do you know what the problem is? Some people are not ready to understand. After two months, the government will come up with a new excuse, they’ll adopt a new funda, for why they have raised the taxes on petrol and diesel. And some people are so naive that they’ll believe it too without thinking it over. They’ll trust the government. And then they’ll even defend the government on social media. I read some of these comments in the previous video on petrol prices, when I was criticising the government, And the comment section was full of “you didn’t talk about Oil Bonds.” That I had hidden the truth about the Oil Bonds. That Oil Bonds were the real reason why the government has raised the taxes. And that they will proudly pay the taxes. I mean, it’s understandable if you’re a BJP politician or a BJP worker, But if you’re a common man with no affiliation to any political party, And you’re the one being looted. Why are you so excited to defend the government? To blindly believe the excuses of the government. thank you so much