Oil Companies Resume Fuel Supply to Air India at Six Airports

Oil companies resumed fuel supply to loss-making Air India at 6 airports, after the company agreed to pay off dues.

File image used for representational purposes.

(Photo: Reuters)

State-owned oil marketing companies on Saturday, 7 September, resumed fuel supplies to the loss-making Air India at six airports, weeks after it was suspended for mounting dues.

The fuel supply was restored following government- mediated talks earlier this week between the parties under which the airline has “committed” to pay Rs 100 crore per month to clear the outstanding dues of Rs 4,300 crore, official sources said.

“Supplies to Air India resumed from Saturday evening,” an OMC spokesperson said without divulging details.

The spokesperson, however, said Air India has agreed to payment terms for future supplies.

Last month, Indian Oil along with Bharat Petroleum and Hindustan Petroleum had stopped supplies to the state-run carrier in Pune, Vizag, Cochin, Patna, Ranchi and Mohali citing mounting dues.

Meanwhile, an Air India official said the fuel supplies were restored after it agreed to pay the oil firms Rs 100 crore per month to clear the dues.

Though Air India has been on a cash-and-carry mode since April, and has been paying Rs 18 crore daily towards fuel bills, OMCs sought clearance of all dues at the earliest.

IOC provides 90-day credit to Air India without collaterals, but the dues have been mounting, and it must be over 240 days now.

“Oil marketing companies wanted Air India to clear all dues at the earliest. But the airline has agreed to pay them Rs 100 crore per month. This will be in addition to the amount it is paying to OMCs against the daily billing,” said an airline official.