Oil firms' fuel hikes, gold monetisation under review, says FM Sitharaman

Union Finance Minister Nirmala Sitharaman on Monday addressed several key domestic fiscal issues, explaining the reasons behind the recent petrol and diesel hikes while also commenting on gold optimisation, the RBI dividend, and India's economic outlook amid the West Asia crisis. Speaking to the media on the immediate note regarding the price hike of retail fuel on the sidelines of the TEXPROCIL Export Awards, Nirmala Sitharaman said the rise in fuel price was an operational matter driven by global procurement realities rather than sudden government policy changes.

She added that the central government had earlier absorbed major financial shocks to protect consumers, resulting in a fiscal impact of nearly Rs 1 lakh crore due to cuts in central taxes over the past two-and-a-half months. "On one hand, for about 80 days, 75-76 days, we ensured that the burden on the people did not increase... even at that time, a 10-rupee increase would have happened that we absorbed, and that is almost a Rs 1 lakh crore hit on the functional budget. But the increases now are coming from the oil marketing companies because they are the ones who are procuring, setting," news agency ANI quoted Sitharaman as saying.

Gold Monetisation Scheme

When asked about broadening the Gold Monetisation Scheme to make unused household gold more productive and reduce dependence on imports, Nirmala Sitharaman said the government is actively examining various proposals. However, she maintained a measured stance on immediate policy shifts, "The very gold that is within our country--those exact representations have reached me. We don't know--I am not in a position at the moment to say anything more on that."

Sitharaman also expressed complete confidence in the financial calculations and assessment methods adopted by the Reserve Bank of India following its recent record dividend announcement. Responding to concerns over the government’s fiscal position, she said, “I fully trust RBI in having made the calculation and given the dividend.”

She further noted that the government depends on structured committee-based mechanisms to verify and support such major fiscal decisions. Addressing India’s wider economic outlook amid global challenges such as the West Asia conflict, the Russia-Ukraine War and fluctuating energy markets, Sitharaman maintained an optimistic stance, saying India’s domestic economic fundamentals remain comparatively resilient.