New Delhi: Air India owes three state-owned oil firms close to Rs 4,500 crore in unpaid fuel bills with payments being delayed by almost seven months, forcing retailers to snap supplies, senior officials said, Friday.
Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) stopped Thursday afternoon jet fuel or Aviation Turbine Fuel (ATF) supplies to Air India at six airports – Kochi, Pune, Patna, Ranchi, Vizag and Mohali – over payment defaults.
“Air India has a 90 day credit period, which means they have to make payment for fuel they buy today by November 21. But Air India has not been making payments and the credit period is now over 200 days,” a senior official at one of the three state-owned oil firms said.
“They (Air India) offered to pay Rs 60 crore which is a drop in the ocean of what they owe,” another official at one of the fuel retailers informed.
IOC, BPCL and HPCL more than a week back had jointly wrote to Air India seeking expeditious clearance of the dues, failing which they will be constrained to take action.
“Air India however failed to provide a clear roadmap to clear dues, forcing us to stop supplies,” the official pointed out.
Another official said Air India gets financial support from the government while for oil firms there is no such help. “Aviation Turbine Fuel (ATF) pricing was deregulated in April 2002. And since then we have to run this business without any subsidy support from the government,” the official added.
At present, the government only provides some subsidy on LPG to help roll out its ambitious Ujjwala scheme of providing free cooking gas connections to poor. There is also a subsidy on kerosene supplied through the public distribution system (PDS).
A senior Air India official had on Thursday said that oil firms stopped fuel supplies to the airline at Kochi, Visakhapatnam, Mohali, Ranchi, Pune and Patna around 4.00pm.
An Air India spokesperson stated Friday that ‘in the absence of equity support, Air India cannot handle the huge debt service liabilities’.
“Our financial performance, however, this fiscal is very good and we are moving towards a healthy operating profit. The airline despite its legacy issues is performing very well,” the spokesperson added.
It should be stated here that Air India has debt of over Rs 58,000 crore.
PTI