Airlines owe Rs 3,610 crore to oil companies

Jet Airways (India) Ltd, the nation’s largest domestic carrier, and other airlines owe state- run refiners Rs 3610 crore ($735 million) for jet fuel as of December 31, junior oil minister Dinsha Patel said.
The airlines have paid oil refiners Rs 1370 crore, Patel said in reply to a question in the upper house of parliament in New Delhi on Tuesday. Jet Airways and its rivals won more time in October to pay the dues as government sought to ease pressure on carriers amid mounting losses after jet fuel prices rose 57% between January and August 2008. Airlines were allowed to pay as much as Rs 2800 crore they owed in six monthly installments by March.
State-owned National Aviation Co of India owed Rs 1311 crore, the minister said. Jet Airways had dues of Rs 1266 crore and Kingfisher Airlines Ltd, owned by India’s largest brewer, owed Rs 1030 crore, according to Patel. Indian Oil Corp, the nation’s largest refiner, was owed Rs 2100 crore by the three airlines, Patel said. Bharat Petroleum Corp was due Rs 795 crore and Hindustan Petroleum Corp had to be paid Rs 710 crore.
Repeated defaults or delays in clearing the dues will force the refiners to supply the airlines jet fuel on a cashand-carry basis, Patel said. Indian Oil stopped selling jet fuel to Kingfisher Airlines on credit from this month after the carrier delayed payments on previous purchases, the refiner’s director of marketing G C Daga had said.
Jet fuel prices in India climbed to Rs 73,673.56 a kiloliter in August from Rs 47,045.16 at the start of last year in Mumbai, home to the nation’s busiest airport, according to Indian Oil’s website. The prices have tumbled 59% since August. Airlines currently pay Rs 29,985.19 for a kiloliter of jet fuel in Mumbai, according to the website.
18/02/09 Bloomberg/Economic Times

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Categories: Indian Aviation- In General Feb 2009