Kingfisher will not get HPCL fuel on credit

The ministry of petroleum and natural gas has pulled up Hindustan Petroleum Corp Ltd (HPCL) for continuing to sell jet fuel to Kingfisher Airlines on credit despite bills of over Rs 600 crore pending for payment against the Vijay Mallya-run airline.
A senior official said the ministry has directed HPCL to sell fuel to Kingfisher Airlines only on cash-and-carry terms as is being done by Bharat Petroleum Corp Ltd (BPCL) and Indian Oil Corp (IOC) since early 2009.
HPCL has also been asked to entrust the issue of jet fuel payments to a senior officer instead of a deputy general manager, who has been handling the matter until now. Both IOC and BPCL have entrusted this job to an executive director.
The total unpaid fuel bills of Kingfisher Airlines have now risen to Rs 905 crore as the company also owes Rs 314.33 crore to BPCL as on March, 2009 and another Rs 30.71 crore to IOC, which supplies a lesser amount of fuel to the airline.
The ministry has also taken strong exception to the fact that HPCL was supplying jet fuel on credit backed by a corporate guarantee from Mallya-controlled United Breweries (UB) Group instead of a bank guarantee as is the normal practice.
26/03/10 Mail Today/India Today

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Categories: Kingfisher Mar 2010