Finance Minister Sitharaman lashes out at the Congress party over UPA-era oil bonds

Finance Minister Nirmala Sitharaman told Parliament that the fiscal burden of oil bonds issued during the United Progressive Alliance(UPA) government continues to affect public finances, accusing the previous regime of deferring subsidy liabilities to future administrations.

Responding to opposition allegations on fuel pricing and fiscal management, Sitharaman said oil bonds issued between 2005 and 2010 were used to compensate public sector oil marketing companies for selling fuel below cost, instead of transparently accounting for subsidies in the budget. She stated that the current government has had to service both principal and interest payments, calling it a “hidden liability” inherited from the past.

According to figures cited in the House, the total oil bond obligation ran into over ₹1 lakh crore, with interest payments continuing years after the bonds were issued. Sitharaman argued that this constrained fiscal flexibility and limited the government’s ability to reduce fuel taxes during global price shocks.

Opposition members defended the UPA’s decision, saying the bonds were issued to shield consumers from extreme fuel price volatility and were a legitimate fiscal tool used worldwide.