PM asks oil and civil aviation minister to resolve PSU oil companies and Airline’s face off

21 Oct 2008

1

Murli DeoraNew Delhi: The Prime Minister, Dr Manmohan Singh is reported to have intervened in the ongoing stand-off between the public sector oil companies who have demanded payment for unpaid fuel bills from the airlines.

Reports suggest that the Prime Minster asked the oil minister Murli Deora and civil aviation minister Praful Patel to talk and resolve the issue at the earliest.

Dr Singh is said to have spoken to oil minister Deora yesterday, and has called a meeting of oil companies and airlines at which civil aviation minster Patel would be present along with representatives of the ministry of finance. Reports suggest that the Prime Minister is concerned about the state of the airlines, and would like to see the issue resolved as the airlines need to continue operations while the oil companies would need funds to supply the former with fuel. 

Consequently, petroleum minister Deora scheduled the meeting for Wednesday over the issue of default in payment of fuel bills by the airlines, which would be attended by civil aviation minister Praful Patel along with representatives of the airlines and the oil companies to find a solution.

Speaking to the media on the sidelines of an industry event, petroleum minster Deora said that his ministry would like to ''help these airlines'' and hence he has called for a meeting tomorrow to explore the options.

Reports have indicated that Airways and Kingfisher Airlines, along with Air India's holding company NACIL collectively owe over Rs2,000 crore in unpaid fuel bills to the three oil marketing companies, Indian Oil, Bharat Petroleum and Hindustan Petroleum. 

Deora said that some airlines have still not paid for the fuel, even after the expiry of the 60-day credit period. He said that while the credit crunch impacted both the airlines and the oil companies, a way out of the liquidity issue is needed for both camps.

Operating costs for airlines have ballooned recently on account of surging fuel prices, and has lead to the Indian civil aviation sector demanding tax concessions on aviation turbine fuel. Jet Airways chief Naresh Goyal met is reported to have met with finance minister P Chidambaram yesterday in order to impress pon him the problems faced by the domestic airlines. Reports suggest that Goyal asked the finance minister to consider the demand of the airline industry and rationalise taxation and levies on aviation turbine fuel.

Oil companies are projected to lose Rs1,47,592 crore on sale of subsidised petrol, diesel, domestic LPG and kerosene, and have been borrowing funds heavily to stay afloat and sustain their operations.

Deora said that airlines ''have to clear their outstanding within the agreed 60-day credit period'', and commitments to do so need to be met, while ruling out the stoppage of supplies of jet fuel to airlines. He acknowledged the airline industry's position, saying that it is going through a ''tough phase'', and that though there were credit issues, the oil ministry would not want them to ''go off the skies''. 

Business History Videos

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more