No fuel without payment: Oil industry to Mallya

B D Narayankar

Mumbai: "First clear our outstanding payment of Rs 158 crore, or else we will stop aviation fuel supply to you," said the state-run oil marketing companies to Kingfisher Airlines Chairman Vijay Mallaya.

Sources said the oil industry had already started supplying aviation turbine fuel (ATF) to Kingfisher and Jet Airways on ''cash and carry basis' from January 27 as they had not paid their dues for October 22 to October 31 even though the 90-day credit was over.

Jet immediately responded and paid off Rs 97.87 crore today, the sources said. But there was no response from Kingfisher which owes Rs 73.08 crore to Hindustan Petroleum for the 10-day supplies and Rs 85 crore to Bharat Petroleum for old instalment.

Vijay Mallya's Kingfisher is the most troubled airline in India with the carrier chalking cumulative loss of Rs 2,500 crore in the first half of fiscal 200-09, largely due to sharp hike ATF of prices.

The three major airlines, including National Aviation Company of India Ltd, owe Rs 3,735 crore to the OMCs as on January 27 for ATF supply but not all is immediately payable as the government extended the 60-day credit by another 30 days in October as reprieve to airlines on condition that they do not fire their employees.

On October 22, it was decided that the airlines could pay their cumulative outstanding of Rs 1,506 crore in six monthly instalments by March 31 and that the OMCs would revise ATF prices every fortnight instead of every month to pass on the benefit of falling ATF prices in the international market.