Pay dues or no fuel supply at 6 airports: Oil firms to Air India

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Pay dues or no fuel supply at 6 airports: Oil firms to Air India

State-run oil marketing companies (OMCs) like Indian Oil Corp., Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL) have told Air India Ltd (AI) that they would be forced to suspend jet fuel supplies to the national carrier if it does not clear pending fuel bills within a week.

In a letter addressed to the finance director of Air India Vinod Hejmadi on Thursday, the OMCs said they would review their decision to continue supplying fuel to Air India, at six airports across the country, if the airline fails to make a monthly lump sum payment for its dues.

“While we are in receipt of your letter dated 10 October 2019, requesting OMCs against stoppage of fuel supply, it has been observed that no timeline has been mentioned with respect to the lump sum payment,” the OMCs said in the letter.

“However, taking into consideration your request, we are deferring our decision to suspend (fuel) supplies to 18 October 2019,” the letter added.

Mint has reviewed a copy of the letter.

“Air India is requested to adhere to its commitment to make lump sum payment towards overdue outstanding, failing which we will be reviewing our decision and stop supplies as per above notice,” according to the letter.

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Previously, the OMCs had on 22 August stopped fuel supplies to Air India at six airports across the country—Kochi, Mohali, Pune, Patna, Ranchi and Visakhapatnam—over payment defaults.

According to the three fuel retailers, loss-making Air India has 5,000 crore in unpaid fuel bills with payments being delayed by almost eight months.

The overdue amount includes the interest accrued on outstanding dues.

The OMCs resumed fuel supplies to Air India from 7 September after the government stepped in to mediate talks between the debt-laden airline and the oil companies. As a part of the deal, the state-run oil companies were supposed to receive at least a total of 100 crore from Air India in September.

Air India has been making daily payments for its fuel purchases but has not been able to make any lump sum payment so far.

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