Cash-strapped Air India Ltd and Kingfisher Airlines Ltd have had fuel supplies snapped because they defaulted on payments to Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL).
On 3 February, Air India’s fuel supplies were discontinued at several stations at 2 hour’s notice, said a government official who declined to be identified. “It led to chaos,” the official said.
Air India’s dues to the public sector oil companies have been escalating. The state-run airline’s outstanding dues, excluding interest, as on 24 January stood at Rs.2,656 crore to IndianOil, Rs.737 crore to BPCL and Rs.725 crore to HPCL, adding up to a total of Rs.4,118 crore. The interest on this till September 2011 adds up to another Rs.582 crore.
Fuel supply to Air India had to be “restricted” on 3 February when the airline defaulted on its payments, the first government official said. The same day, civil aviation secretary Nasim Zaidi had said he had asked the petroleum secretary to maintain fuel supplies to the carrier. “I have spoken to the petroleum secretary not to disrupt (fuel) supplies and he has assured,” Zaidi had said.
The Group of Ministers on aviation gave an in-principle approval for airlines to directly import aviation turbine fuel for their own use, which is about 50% dearer here than regionally. Cash-strapped domestic carriers, with a debt burden of Rs 70,000 crore, can hope to lower their fuel bills by 10%-15% - fuel accounts for nearly 40% of their overall costs.
However, airlines do not have their own infrastructure to import fuel and ferry it to fuelling facilities at airports. So, unless there is an open access policy that mandates existing fuel marketing companies to make their logistics facilities available to the airlines, certainly for a fee, no jet fuel import would take place.
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