The Group of Ministers (GoM) on Air India in a meeting on 18 August 2011 under the chairmanship of Finance Minister Pranab Mukherjee decided to ask State-run oil marketing companies to start providing Aviation Turbine Fuel (ATF) to the cash trapped national carrier, Air India.
Cash-strapped national carrier had been put on notice by the oil companies, which are currently adhering to cash and carry system as of now.
The GoM asked a Committee of Officers/Secretaries to give views on finalising the financial restructuring and turnaround plan for Air India. The committee is expected to give its report by the first week of September 2011.
The State-run oil marketing companies were asked to immediately switch AI from cash-and carry to credit system for two to three months.
Shifting to normal credit will reduce uncertainty of fuel supply on day-to-day basis. At present, the daily oil bill of the carrier is about Rs. 16.7 crore.
The public sector oil marketing companies such as Indian Oil (IOCL), Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) had placed Air India under cash and carry scheme from 7 December 2010. As on 30 June 2011 total dues outstanding to IOCL was Rs 1558.18 crore, while the outstanding against HPCL was Rs 342.27 crore. The carrier owed BPCL Rs 432.65 crore.
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