Debt-ridden Air India denied jet fuel by oil companies

State-owned oil companies on Thursday snapped supplies of jet fuel to Air India for failing to honour payments even after 90-day credit period, but the ailing national carrier said it has paid Rs 180 crore and would pay another Rs 40 crore by Friday.

"I have spoken to the petroleum secretary not to disrupt (aviation turbine fuel) supplies and he has assured," Civil aviation secretary Nasim Zaidi said. All three oil companies -- Indian Oil, Bharat Petroleum and Hindustan Petroleum -- jointly stopped ATF supplies to Air India at Delhi, Mumbai, Kolkata, Chennai, Trivandrum and Kochi from 1600 hrs today.

Zaidi said the cash-strapped carrier had just paid Rs 180 crore. Rs 40 crore would be released tomorrow and another Rs 40 crore soon. Senior Air India officials claimed the airline owed Rs 260 crore to the oil companies for the credit period and "we are well within the credit limit."

The oil companies decided to stop ATF supplies saying Air India had not honoured its commitment to make payments for jet fuel it bought from the oil companies even after expiry of 90 day credit period.

"The government had last year asked us to give a 90-day credit period to Air India, which we diligently did. As per that, payments for ATF sold to Air India in mid-October was due on January 22 but it did not make any payment," an oil company official said. Air India owes over Rs 4,170 crore to public sector oil companies in unpaid jet fuel bills, according to figures tabled in Parliament.

- Asian Tribune –

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