Aviation sector asked to cough up cash they owe various oil companies, or risk closure
Aviation sector asked to cough up cash they owe various oil companies, or risk closure
It's time to pay up or shut shop for airlines that have hitherto defaulted on their fuel payments.
Under pressure from various state-owned oil companies, top sources within the Union government said they were in no mood to mollycoddle airlines unable to keep their pecuniary distress in check.
Air India and Kingfisher jointly owe Rs 35,00u00a0 crore to oil companies
"We also have to import oil and have a deadline to clear the dues. Any company, including airlines, should make the payment on time, or we will have to get harsh with them in future," said a senior official from the petroleum ministry.
The official added that payments were pending to various countries, for crude oil import, one such being Iran.u00a0
Import dues
Various news reports have pegged India's debt to Iran at five billion dollars. Iran fulfills about 12 per cent of India's oil requirements. Iran has been demanding immediate payment of its dues from India.
A recent statement by Irani caretaker Oil Minister Mohammad Aliabadi also reflected the pressure on the government to pay up.
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"Iran will not cut oil supplies to India which will find a way to pay for its exports within the next two months," Aliabadi had said.
Two major players in the Indian aviation sector, Kingfisher and Air India, jointly owe more than Rs 3,500 crore to oil companies.
While the former owes Rs 1,000 crore, the latter owes Rs 2,500 crore to the oil companies. In several occasions in the past, the oil companies have even stopped fuel supply to these airlines owing to non-payment of dues, which led to suspension of flight operations.
The situation could only be resolved after top officials from Petroleum and Civil Aviation Ministry intervened on behalf of the defaulting airlines. Both the airline companies have been put on cash-and-carry basis in the last few months ('Oil companies starve debtor Kingfisher')
In April, Petroleum Minister Jaipal Reddy wrote a letter to the Union Civil Aviation Minister Vayalar Ravi demanding that Air India make a minimum daily payment of Rs 16.5 crore foru00a0ATF supplied by public sector oil marketing companies.
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The petroleum minister said if Air India failed to make the minimum payment on daily basis, then supply of ATF on credit would be suspended from May.
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