New Delhi, Aug 17 (IANS): A day after Finance Minister Nirmala Sitharaman ruled out any cut in excise duty on fuel, as of now, since the previous UPA government had reduced fuel prices by issuing oil bonds of Rs 1.44 lakh crore, senior Congress leader and former Finance Minister P. Chidambaram hit out, terming her statement "astonishing" and "incredible ignorance".

In a series of tweets, Chidambaram said: "The Finance Minister's statement that servicing oil bonds stands in the way of giving relief on petrol and diesel prices is astonishing. At best the statement is incredible ignorance; at the worst it is motivated malignity."

He said that if the UPA government wanted to subsidise fuel prices, it had the choice of finding the money by borrowing directly or asking the oil companies to borrow.

"In either case, servicing the loan (interest) would be the responsibility of the Central government," he said.

"Every analyst and every lender knew that oil companies borrowed as a surrogate of the central government and mentally added the borrowing to the fiscal deficit."

In another tweet, Chidambaram said: "Having profited several times over through exorbitant taxes and cesses on fuel, the NDA has no right to comment on the fuel subsidy. The people know that UPA gave them relief and the NDA is crushing them through oppressive taxes and cesses."

His remarks came a day after Sitharaman said on Monday that that the Narendra Modi government is paying for reduction in prices of petroleum products during the time of Manmohan Singh government, due to the interest and principal having to be repaid on oil bonds from that period.

Sitharaman said that as of 31 March, 2021, there was Rs 1.31 lakh crore in outstanding principal and Rs 37,340 crore in interest yet to be repaid on these oil bonds.

"We should have released a white paper in 2014 listing out all that we inherited from the previous government. Oil bonds were a big part of that. The previous govt had reduced to prices but that burden had to be taken by the Oil Marketing Companies (OMCs) through these oil bonds," Sitharaman said at a media interaction, on being asked whether the Centre would follow Tamil Nadu's example and slash excise duty on fuel.