The state-run Indian Oil Corporation (IOC) on Tuesday said that it will discontinue fuel supplies to Air India as it failed to clear pending dues.
The state-run Indian Oil Corporation (IOC) on Tuesday said that it will discontinue fuel supplies to Air India as it failed to clear pending dues, CNBC TV-18 reported citing IOC. It comes after public sector oil marketing companies (OMCs) including IOC, BPCL and HPCL on October 10, 2019 threatened to stop fuel supplies to the fiscally strapped national carrier at six major airports in the country. The supply will stop from October 18 as Air India failed to comply with Rs 100 crore per month payment agreed earlier, the latest report added. Air India’s total dues including interest amounting to Rs 450 crore currently stand at Rs 2,700 crore. On October 5, 2019 too, the oil companies had sent a notice to the airline asking to clear payments.
On October 13, 2019, Air India said the aviation jet fuel payment issues are being sorted out and will be resolved soon with the oil PSUs, news agency PTI reported. The airline also ‘assured’ its customers of smooth operations, saying it has taken all the measures in the eventuality of the two sides failing to reach an understanding on the issue.
Meanwhile, in June last year, the government called off the proposed 76 per cent stake sale in the debt struck national carrier Air India after no buyer showed interest. EY quoted analysed the reasons behind poor show as government’s decision to retain 24 per cent stake and corresponding rights, high amount of allocated debt, changes in macro environment, individuals not being allowed to bid, profitability track record and bidders not being able to form a consortium within given time period. The reports say that the government is yet again mulling a plan to relax some terms in order to divest its stake in the financially torubled airline.