Fuel retailers defer decision to suspend jet fuel supply to Air India
Air India has a debt of over Rs 58,000 crore, Centre had decided to offload 74 per cent stake in the airline but got no takers, since many private companies were apprehensive to be in a joint venture with the government.
SNS | New Delhi | October 18, 2019 1:25 pm
Air India aircraft preparing for take off at San Francisco International Airport (SFO) (Representational Image: iStock)
State-owned fuel retailers on Friday decided to defer their decision to suspend jet fuel supplies to Air India after the national carrier promised to make regular payments to clear outstanding dues, officials said.
This comes after Public Sector Undertaking (PSU) oil companies had stopped fuel supplies to Air India at six airports of Kochi, Mohali, Pune, Patna, Ranchi and Vizag on August 22 over payment defaults, which was later resumed last month.
The three state-owned oil companies, Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) had earlier this month threatened to snap aviation turbine fuel (ATF) supplies to Air India at six major airports over payment delays. Officials said the decision to defer the move follows Air India making a written request for the same as also promising to make regular payments to clear over Rs 5,000 crore in overdue fuel bills.
Air India has a 90-day credit period, which means the aviation turbine fuel (ATF) it buys on a given day has to be paid for in three months. But Air India had not been making payments and the credit period was 230 days, forcing oil firms to snap supplies in August this year.
The national aviation company uplifts about 250 kilolitres (kl) of ATF at the six airports on a daily basis. Air India’s flights operating from the six airports, where ATF supplies were suspended, were tanking up from other airports. Air India has a debt of over Rs. 58,000 crore.
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The government has already decided to transfer Rs 29,464 crore of its debt into a special purpose vehicle. Centre had decided to offload 74 per cent stake in the airline but got no takers, since many private companies were apprehensive to be in a joint venture with the government.
