Why petrol and diesel prices are increasing in India

Rahul Gandhi is quite active on social media, he will be attacking the Central government on each and every issues. Now Rahul Gandhi tweeted cause and concern for the rising petrol and diesel prices.

Rahul Gandhi tweeted on the Social Media twitter; he asked when the petrol and diesel prices come down will. Will it be down by the next election.

पेट्रोल-डीज़ल के दाम कब कम होंगे? जब अगले चुनाव होंगे।

पेट्रोल-डीज़ल के दाम कब कम होंगे?

जब अगले चुनाव होंगे। pic.twitter.com/frzGcmOU7r

— Rahul Gandhi (@RahulGandhi) June 22, 2021

News Analysis and reason for the rise

Petrol and diesel have been rising each and every day and the common public is mostly affected. The petrol prices have increased to more than 100 in various states in India. The main reason for the petro/diesel is the policies of the last UPA / Congress government.

During 2004-2014 of the Congress Rule in India, oil subsidies were converted to oil bonds by the UPA government under Prime Minister Dr Manmohan Singh.

"These bonds were issued to finance the subsidy given on some petroleum products to cover the difference between the purchase price by the oil companies and the reduced price they were forced to sell by the UPA government," the government sources said.

Oil bonds are government securities issued to oil marketing companies instead of direct cash payouts, normally done through budget subsidies.

The increased prices of petrol and diesel is a legacy of UPA’s mismanagement.

We are paying for the oil bonds that will come up for redemption starting FY2021 till 26, which were issued by UPA to oil companies for not increasing retail prices then!

Bad economics, bad politics. pic.twitter.com/I4hZR0i1K8

— Amit Malviya (@amitmalviya) June 20, 2021

Now, from this year 2021, such bonds worth ₹ 1,30,701 crores have been up for redemption and this will carry on till 2026. They also allowed the government of the time to pass on the responsibility to the government that would follow. The interest payable on them for this year is ₹ 10,000 crore.

As global crude oil prices shot up drastically in the years following the US invasion of Iraq, the UPA government of Manmohan Singh decided not to increase retail petrol and diesel prices correspondingly. Prices had hit an all-time high of $147 in the summer of 2008—compared to around $71 presently.

“The country (is) yet to recover from the shock of oil bonds worth 1.4 lakh crores issued (by) UPA,” petroleum minister Dharmendra Pradhan had said then.