Pay daily or we’ll turn off fuel supply: Oil companies to Air India

Pay daily or we’ll turn off fuel supply: Oil companies to Air India

Oil marketing companies have threatened to stop selling jet fuel to Air India unless it clears its fuel bill on a daily basis even as the national carrier’s dues to oil companies have crossed Rs 5,000 crore, multiple people familiar with the development said. Air India buys fuel worth about Rs 20 crore daily, which the carrier has not been able to pay in full, forcing fuel companies to issue an ultimatum.

“Air India has not been regular with payments due to its financial problems,” a senior aviation ministry official said on a condition of anonymity. “Air India and oil companies are now negotiating.” The move from oil companies comes soon after Air India cleared outstanding dues to foreign and Indian lenders, and other vendors, using cash infusions from the government. The carrier, however, left out oil companies to whom it owes more than Rs 5,000 crore, including interest.

An oil ministry official said the airline has not been making its daily fuel payment in full for the past one and half years now. A senior Air India official said the recent increase in jet fuel prices has added to the situation. “We are speaking to oil companies on the issues and it is being resolved,” the person said. Read More

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