Oil cos claim penal interest on delayed aviation fuel bills

New Delhi: The public sector oil retailers are claiming penal interest from domestic airlines that have defaulted on their bills for aviation turbine fuel (ATF).
The oil companies are also seeking bank guarantees on outstanding payments for covering the entire exposure.
The penalty has been calculated as PLR plus two percentage points. Oil company sources told Business Line that the penalty has been sought on the default in payment for the amount that was payable up to September 30, 2008.
As on October 22, the domestic airlines National Aviation Company of India Ltd (NACIL), Kingfisher Airlines and Jet Airways collectively owed Rs 2,926 crore to the oil retailers on purchase of ATF.
Sources said that for outstandings beyond September 30 and up to March 2009 the oil companies have orally communicated to the airlines that interest will also payable on this amount.
The Ministries of Petroleum and Civil Aviation are also deliberating on the issue, sources said.
Meanwhile, the aviation companies have repaid the second instalment of the total outstanding as on October 22 to the retailers – Indian Oil Corporation (IOC), Hindustan Petroleum Corporation and Bharat Petroleum.
Jet Airways has paid Rs 145 crore to IOC, Kingfisher Airlines has paid Rs 19 crore and the NACIL has paid Rs 73 crore.
As regards current dues, the payment schedule was enhanced from 60 days to 90 days.
16/12/08 Richa Mishra/Ashwini Phadnis/Business Line

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Categories: Indian Aviation- In General Dec 2008