Economy

Ministers' panel wants oil cos to provide fuel to Air India on credit again

Our Bureau New Delhi | Updated on November 12, 2017




The Group of Ministers (GoM) on Air India wants the state-run oil marketing companies to start providing aviation turbine fuel (ATF) to the carrier on credit once again. This means the current cash-and-carry system would have to stop.

The group, which met on Thursday under the chairmanship of the Finance Minister, Mr Pranab Mukherjee, is likely to finalise the financial restructuring and turnaround plan by the middle of next month.

It had asked a Committee of Officers Secretaries to give views for the plan. The committee is expected to give its report by the first week of September.

“The Petroleum Ministry will ask the state-run oil marketing companies to immediately switch Air India from cash-and carry to credit system for two to three months,” said Mr Vayalar Ravi, Minister for Civil Aviation.

Shifting of the carrier from the cash-and-carry to normal credit will reduce uncertainty of fuel supply on day-to-day basis. At present, daily oil bill of the carrier is about Rs 16.7 crore.

According to sources, the current problem is that as soon as the bill amount reaches Rs 14 or Rs 15 crore by 2 p.m., the computer stops generating invoices which results in supply being stopped.

At least on two occasions in the last few days, the debt-laden company was forced to cancel and delay its flight on account of fuel supply being stopped.

Published on August 18, 2011

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