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State-owned oil firms resume ATF supply to AI after parleys

Posted by on August 11, 2011 0 Comment

State-owned oil firms on Wednesday stopped jet fuel supplies to cash-strapped Air India (AI) for non-payment of dues but resumed it immediately thereafter, as officials of the Civil Aviation and the Petroleum Ministries put their heads together to resolve the issue.

Flight operations of the ailing national carrier were not affected as the oil companies stopped supplies from 4 p.m. at some stations, including major ones such as Delhi, Mumbai, Chennai and Kolkata, but resumed within an hour.

“Indian Oil, Bharat Petroleum and Hindustan Petroleum have from 4 p.m. stopped aviation turbine fuel [or jet fuel] supplies to AI,” a senior industry official said.

Soon thereafter, another official said the matter had been resolved and jet fuel supplies restored after hectic parleys between officials of the two Ministries and AI.

AI was put on cash-and-carry mode of debit from December last year on account of non-payment of Rs. 2,200 crore dues to the three State-run oil companies.

Under cash-and-carry, supplies are made only when cash is paid.

The oil companies are understood to have been informed that the airline would be paying its daily dues from Thursday.

Severe cash crunch has led the national carrier to previously default on payments, affecting its flight schedules. Hindu

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