Monday, September 26, 2022

Air India owes Rs 4,500 cr to IOC, BPCL, HPCL

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New Delhi: Air India owes around Rs 4,500 crores in unpaid fuel bills to oil companies, sources said on Friday. They added that payments have been delayed to Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) by almost seven months. The delay forced these oil marketing companies to cut jet fuel supply to Air India at six airports — Kochi, Pune, Patna, Ranchi, Vizag and Mohali — on Thursday afternoon.

‘Air India’s credit period is now over 200 days’

“Air India has a 90-day credit period, which means they have to make payment for fuel they buy today by November 21. But Air India had not been making payments and the credit period was now over 200 days,” a senior official at one of the three state-owned oil firms said. Another official said, “They (Air India) offered to pay Rs 60 crore which is a drop in the ocean of what they owe.”

‘Air India has failed to provide a clear roadmap’

Over a week back, IOC, BPCL and HPCL wrote to Air India jointly, seeking expeditious clearance of dues, failing which they said they will be constrained to take action. “Air India, however, failed to provide a clear roadmap to clear dues, forcing us to stop supplies,” the official said. Another source said that while Air India gets financial aid from the government, oil companies do not get any such help. “Aviation Turbine Fuel (ATF) pricing was deregulated in April 2002. And since then we have to run this business without any subsidy support from the government,” he said.

The backdrop

The news comes as reports said that Air India was seeking an emergency debt of Rs 2,500 crores from the government to meet its working capital requirements. The PSU is finding it difficult to service its debt without any fresh capital infusion from the Centre. An Air India spokesperson had said on Thursday that “in the absence of equity support, Air India cannot handle the huge debt service liabilities.” “Our financial performance, however, this fiscal is very good and we are moving towards a healthy operating profit. The airline despite its legacy issues is performing very well,” he had added. Air India has a debt of around Rs 60,000 crore.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)

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