Mumbai: The oil marketing companies such as Indian Oil Corp. Ltd, Hindustan Petroleum Corp. Ltd and Bharat Petroleum Corp Ltd have been directed to supply compete fuel requirement of national flag carrier Air India Ltd for the next three months to facilitate the airline to operate all its flights that got curtailed and cancelled recently.
According to a media statement issued late Monday night, Air India said there will be a moratorium for three months and Air India will be allowed to uplift additional fuel worth Rs 1 crore in the next three months.
Cash strapped Air India, that has an accumulated loss of Rs 13000 crore and which is in the midst of financial restructuring, was forced to curtail several flights because it could not afford to pay more money to purchase jet fuel to fly all of its planes.
Following the defaults to the oil companies, oil marketing companies have put Air India under cash-and-carry mode, where Air India had to pay cash upfront daily to get jet fuel, which is popularly known as Aviation Turbine Fuel (ATF). Air India had to shell out Rs 16 crore a day towards purchasing jet fuel.
Air India will continue to pay the oil marketing companies Rs 16 crore per day as decided earlier even as it will be uplifting an additional fuel of around 200 kilo litre.
“This decision was taken in a meeting between Vayallar Ravi, union minister for civil aviation, and Jaipal Reddy, union minister for petroleum, today. The meeting was attended by senior officers of both the ministries and chairman and managing director of Air India,” the statement added.