Air India to get around 225 kilolitre of aviation fuel per day

Air India today got a breather on payment of dues to state-run oil companies, which have restricted fuel supply to it, following the intervention of civil aviation minister Vayalar Ravi who met Petroleum Minister S Jaipal Reddy to sort out the issue.

In the meeting, Ravi asked Reddy to direct the oil marketing companies to provide aviation turbine fuel to Air India so that the national carrier can restore its cancelled or curtailed flights, sources said.

Following the meeting, in which CMDs of oil companies and Air India and secretaries from both the ministries were present, it was decided that oil companies would provide Air India additional fuel for next three months to allow it to operate all its flights.

Air India was put on cash and carry mode of debit from December last year on account of non-payment of Rs 2400 crore dues to the three state-run oil companies.

Due to the fuel-supply restrictions by these companies, the cash-strapped carrier had to combine and even curtail between 10 to 15 per cent of its flights on a daily basis for the past two months. It runs an average of 320 flights per day.

Air India will continue to pay Rs 16.5 crore to oil companies per day as per the agreement between the companies and the national carrier.

There will be moratorium for three months on the oil companies and Air India will be allowed to take additional fuel worth Rs one crore in the next three months.

As per the new directive, Air India will get around 225 kilolitre of aviation fuel per day to fulfil its requirements, sources said.

It owes Indian Oil Corporation (IOC) about Rs 1900 crore, another Rs 300 crore to Bharat Petroleum and the rest to Hindustan Petroleum.