‘Indian Oil Corporation Resumes Fuel Supply to Air India at Six Airports,’ Says Chairman Sanjiv Singh

The development comes days after the IOC threatened to stop fuel supply to Air India it doesn't clear payments by October 18.

New Delhi: Indian Oil Corporation Ltd (IOC) Chairman Sanjiv Singh on Thursday confirmed that the company has resumed fuel supply to Air India at six airports. The company said it has done so keeping in mind that outstanding should not be mounted.

“Air India’s outstanding on Indian Oil Corporation Ltd (IOC) is Rs 2,640 crores. The IOC has resumed fuel supply to Air India at six airports. We had started fuel supply keeping in mind that outstanding should not be mounted,” IOC Chairman Sanjiv Singh said.

Sanjiv Singh, Chairman, Indian Oil Corporation Ltd (IOC): Air India's outstanding on Indian Oil Corporation Ltd (IOC) is Rs 2640 crores. IOC has resumed fuel supply to Air India at 6 airports. We had started fuel supply keeping in mind that outstanding should not be mounted.

— ANI (@ANI) October 31, 2019

The development comes days after the IOC issued a warning to Air India, asking it to clear the payments by October 18 or they will stop the fuel supply at six major domestic airports of the country.

In a letter to Air India on October 11, the three oil PSUs – Indian Oil Corporation Ltd (IOCL), Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) – stated that the outstanding has not come down considerably in the absence of the committed monthly lump sum payment”.

Prior to this, these three fuel suppliers in August this year had stated that the Air India owed Rs 5,000 crore fuel bills and alleged that the payment has been delayed by almost eight months.

Taking strong action against Air India, Indian Oil Corp, Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) had on August 22 stopped fuel supplies to Air India at six airports of Kochi, Mohali, Pune, Patna, Ranchi and Vizag over payment defaults. However, when the Ministry of Civil Aviation interfered in the matter, these fuel suppliers started fuel supply on September 7.

Again on October 5, when the oil companies in a letter asked the Air India to clear their payment, otherwise it may lead to stop of fuel supply, the airliner requested them not to do so.

The development comes at a time when the central government is planning to initiate the process of divestment of its stake in Air India, which has a debt of over Rs 60,000 crore, from November this year.