Wednesday, August 28, 2019

IOC says supplying to Air India only on daily cash payments

Indian Oil Corporation(IOC) is supplying jet fuel to state run Air India only on a daily cash payment and is looking at recourses to recover its outstanding dues from the national carrier, senior executives from the oil marketing company said Wednesday.
IOC, along with the other two state-run oil marketing companies, Bharat Petroleum Corp and Hindustan PetroleumNSE 2.04 % Corp, stopped supplying fuel to Air India and its Alliance Air subsidiary at six airports from August 22 due to mounting outstanding dues. The three fuel suppliers have dues of over Rs 5,000 crore from the airline.
“We don’t want the airline, their customers of the nation to suffer. We had to stop supplies to some centres not to cause any inconvenience but to indicate that we can’t go on like this. It was the right signal after a lot of follow up with the airline. But we are seeing no improvement,” IOC chairman Sanjiv Singh told reporters.
He said IOC’s total outstanding, including Rs 500 of interest, from Air India was Rs 2,900 crore. Air India is allowed a credit cycle of 90 days, which has now stretched to 250 days.
“We are not letting the outstanding go beyond what it is right now. Air India is on a cash-and-carry basis, whatever fuel they buy from us, they have to pay on a daily basis. Now we are asking them to reduce the outstanding,” said Sandeep Kumar Gupta, IOC's director -finance.
28/08/19 Rachita Prasad/Economic Times

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