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Richa Mishra

New Delhi, Dec. 16 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.

At an inter-ministerial meeting held on October 22, when discussing the adverse financial position of the civil aviation sector, it was decided to allow the airlines to clear their dues in six equated monthly instalments, latest by March 31, 2009.

As regards current dues, the payment schedule was enhanced from 60 days to 90 days.

The oil companies had also raised the issued of bank guarantees on unpaid dues at that meeting.

Oil company sources said, “The issue of bank guarantee was to protect our own interest”.

More Stories on : Petroleum | Airlines

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