Petroleum Minister Murli Deora delivered a damning criticism on Thursday of Jet Airways' decision to sack employees, saying the timing of the decision was in bad taste.
"This is not the right time to retrench people, particularly before Diwali. . . I do not approve of such a move and you cannot just do such a thing," Petroleum Minister Murli Deora told reporters.
Petroleum Secretary R S Pandey separately pointed out that the airline had defaulted on payment of fuel bills to oil companies and owed them Rs 259 crore (Rs 2.59 billion).
The airline, which is battling to survive the downturn in the industry, has handed out the pink slip to 1,900 employees, mostly cabin crew - which it expected to result in savings of $1 million a month.
The airline has also struck an operational alliance with competitor Kingfisher Airlines.
Deora said he would 'appeal to (Jet chief Naresh) Goyal to please not resort to such extreme steps.'
Pandey said the airlines have to make clear their outstanding at the earliest as oil firms were as such losing heavily on sale of petrol, diesel, domestic LPG and kerosene.
"They will have to borrow (to clear the outstanding)," he said.
Deora said Jet Airways' decision to sack 1,900 employees was not in good spirit and he did not approve of it, while asking Goyal to 'please look for solutions.'
Pandey justified the present pricing structure of ATF saying the rates were fixed at imported price (import parity pricing) because around 80 per cent of the crude oil used to produce the fuel was imported at international rates.
Pricing of ATF was de-regulated on April 1, 2001 and since then has been governed by fluctuations in the global oil market.
Over the base price, customs duty of 5 per cent, excise duty at the rate of 8 per cent, 3 per cent education cess and sales tax at an average of 25 per cent is levied.
State taxes and excise duty amounts for about one-third of the price of ATF.
"If there are demands for reduction in taxes, the issue is to be addressed by the finance ministry and the respective state governments," Pandey said when asked to respond to demand by Civil Aviation Minister Praful Patel for cut in tax rates.
Talking of other airlines, he said Kingfisher owed Rs 110 crore (Rs 1.1 billion) to the oil companies, of which Rs 60 crore (Rs 600 million) remained unpaid after expiry of the credit period. National Aviation Company of India Ltd did not have any grace period with oil firms and had an outstanding of Rs 606 crore (Rs 6.06 billion) as on October 8.
Kingfisher bought jet fuel worth Rs 72 crore (Rs 720 million) every month, while NACIL's monthly fuel bill ran into Rs 337 crore (Rs 3.37 billion).
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