BUSINESS

End oil cos-airlines face-off soon: PM

Source:PTI
October 21, 2008 16:24 IST
Prime Minister Manmohan Singh is believed to have stepped in the stand-off between state-run oil companies and private airlines over unpaid fuel bills issue, asking Oil Minister Murli Deora and Civil Aviation Minister Praful Patel to resolve it at the earliest.

Singh spoke to Deora on Monday, who has now called a meeting of oil companies and airlines on Wednesday. Patel and representatives of Ministry of Finance will also be present at the meeting.

"The Prime Minister is concerned. No one wants airlines to stop operations nor does anyone want oil companies to lose. A solution needs to be found at the earliest," a source said.

Deora, speaking to reporters on the sidelines of an industry event, did not say anything on Prime Minister's concern but said: "We want to help these airlines and so I have called a meeting tomorrow to explore the options."

Naresh Goyal's Jet Airways and Vijay Mallya-owned Kingfisher Airlines and state-run NACIL together owe more than Rs 2,000 crore (Rs 20 billion) in fuel bills to Indian Oil, Bharat Petroleum and Hindustan Petroleum. "Some of them have not paid even after the expiry of 60-day credit period," Deora said.

Oil companies, who are projected to lose Rs 1,47,592 crore (Rs 1475.92 billion) on sale of petrol, diesel, domestic LPG and kerosene, are virtually living on borrowed funds and need liquidity.

"Airlines have to clear their outstanding within the agreed 60-day credit period. Commitments (to pay within 60 days) have to be met," he said but ruled out stopping jet fuel supplies to airlines.

"We know that airline industry too is going through a tough phase. There are credit problems and we do not want them to go off the skies," he said.

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Source: PTI
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