Oil firms push Air India for roadmap on repayment of past dues

State-owned oil marketing companies have put Air India on cash-and-carry since December. Air India buys jet fuel worth Rs18.5 crore per day from the three state oil firms, but it pays only Rs13.5 crore. However, Air India sought discounts similar to the ones given to private airlines

State-owned oil marketing companies have put Air India on cash-and-carry since December. Air India buys jet fuel worth Rs18.5 crore per day from the three state oil firms, but it pays only Rs13.5 crore. However, Air India sought discounts similar to the ones given to private airlines

New Delhi: State-run oil firms have demanded that cash-strapped Air India set up a roadmap to clear over Rs2,400 crore in past fuel bills and make upfront payment for all future purchases of aviation turbine fuel (ATF), reports PTI.

Air India has defaulted on payment of about Rs2,000 crore in jet fuel bills since last year and the total outstanding now amounts to over Rs2,400 crore after including Rs400 crore in interest, industry officials said.

“Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation already incur huge losses on selling petrol, diesel, domestic LPG and kerosene way below their production cost and to expect them to sell ATF at subsidised rates is not acceptable,” an official said.

Oil firms have put Air India on cash-and-carry since December. Air India buys jet fuel worth Rs18.5 crore per day from the three state oil firms, but it pays only Rs13.5 crore. This led the oil firms to threaten to stop supplies of ATF beyond what Air India pays for.

At a meeting called by cabinet secretary KM Chandrasekhar last week to resolve the payment impasse, Air India sought discounts similar to the ones given to private airlines.

Oil companies give a Rs1,600-Rs1,800 per kilolitre (kl) discount to private airlines on promise of assured payment.

After adding finance charges for a 90-day credit period, the discount comes to Rs3,600 per kl.

“Even if this discount is stretched to Rs5,000 per kl, the Rs18.5 crore per day fuel bill will not become Rs13.5 crore. After including some more concessions, the fuel bill at best will come down to Rs17 crore a day, a far-cry from the Rs13.5 crore paying capacity of Air India,” he said.

Officials said Air India was discussing only the payments for future ATF purchases and there was no word on how the state carrier will clear the past outstanding.

“Air India talks of getting the same discounts as private airlines, but does it know that ATF purchases by airlines such as Jet Airways and Kingfisher Airlines are covered by a bank guarantee?” an official asked.

Both Jet Airways and Kingfisher have brought down their outstanding to manageable levels and have provided bank guarantees to cover against any default.

IOC, HPCL and BPCL sell petrol, which the government had freed from its control in June last year, at a discount of about Rs4.50 a litre to its imported cost. In addition, they sell diesel at a loss of Rs15.79 a litre or Rs283 crore per day.

Furthermore, the three retailers are losing Rs24.74 per litre of kerosene and Rs297.80 per 14.2-kg LPG cylinder.

The three firms are losing a cumulative Rs432 crore in revenue every day on selling diesel, domestic LPG and kerosene below cost, officials said, adding that for the full fiscal, the three are projected to lose Rs78,061 crore in revenues.
 

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COMMENTS

Shadi Katyal

6 years ago

This is the beauty of being PSU as all oil and Air India re chips of sme block. If AirIndia was buying from private oil companies, it would have been shut down long ago which will come sooner or later as all 4 parties cannot keep showing losses. We are used to such losses as their is no accountability being PSU,
One has to ask simple one question that how come private air industry is making profit while AirIndia is loosing Crores every day and so how is she going to pay the oil bill?
Now we have another problem of not fully qualifide pilots and thus safety of paying public has been compromised.Air India doesn't have foreign traveling passengers as compared to all foreign carriers carrying Indian such passengers because of lack of courtesy and service. It is India CHALTA HAI BHAI

Intas Pharma files documents with SEBI for IPO

Intas Pharmaceuticals has filed documents with SEBI for an initial public offer that includes sale of fresh equity worth Rs425 crore

Drug maker Intas Pharmaceuticals said it has filed documents with the market regulator Securities and Exchange Board of India (SEBI) for an initial public offer that includes sale of fresh equity worth Rs425 crore.

"Intas Pharmaceuticals has filed its draft red herring prospectus (DRHP) with the SEBI for an initial public offering," the Ahmedabad-based firm said in a statement.

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PTC India Financial Services lists at 9% discount

Shares of PTC India Financial Services made a weak debut on the bourses today, shedding 9.28% vis-a-vis its issue price of Rs28 in the early trade on the BSE

Shares of PTC India Financial Services made a weak debut on the bourses today, shedding 9.28% vis-a-vis its issue price of Rs28 in the early trade on the Bombay Stock Exchange (BSE).

The scrip opened at Rs28 equivalent to the issue price on the BSE, but within minutes of opening trade, it lost ground and fell by 9.28% to trade at Rs25.40.

Similarly on the National Stock Exchange, the stock opened 4.46% down at Rs26.75 a piece and subsequently plunged further to Rs25.55, down 8.75% from its issue price.

PTC India Financial Services, the non-banking financial institution promoted by PTC India, had fixed a price band of Rs26-Rs28 a share for its initial public offering (IPO).

The company intends to utilise the proceeds for augmenting its capital base to meet the future capital requirements arising out of growth in its business.

PTC Financial Services was promoted to make investments in companies engaged in power generation, equipment supply and fuel source projects.

The company is focused primarily on power generation projects in India, but also provides fee-based syndication and advisory services as well as carbon credit financing against certified emission reductions.

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COMMENTS

Sachin Bhutada

5 months ago

Any follow up on the the company? Thanks

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