Pay Up or No Fuel: OMCs to Air India

In another distressing news for the national carrier Air India, the oil marketing companies (OMCs) have threatened to discontinue fuel supplies due to mounting due payments. Passengers booked with AI at six major airports may face flight cancellations or delays from October 18, the date of shutting fuel supplies decided by OMCs.

In a missive sent to AI, the three oil PSUs, Indian Oil Corporation Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd, said: The outstanding has not come down considerably in the absence of the committed monthly lumpsum payment.

The letter sent on Thursday was a follow-up to a notice sent to AI on October 5. In the recent letter, the OMCs have stated that they will stop the fuel supplies if AI does not make ‘lumpsum payments, as has been agreed’.

AI owes about INR 5,000 crore to these companies and this is not the first time the OMCs have decided to discontinue fuel supply. In August, OMCs had stopped supplying fuel to Air India flights in Pune, Vizag, Cochin and Patna.

“In the event of non-receipt of monthly lumpsum payment, as has been agreed in the meetings held on 26/08/2019 and 04/09/2019, OMCs will be constrained to stop fuel supplies at six major airports effective October 11, 2019,” the letter reads. The letter adds that OMCs have decided to defer the date to October 18, 2019.

The six airports are Delhi, Mumbai, Chennai, Kolkata, Hyderabad and Bengaluru and would mean that a number of international flights could be cancelled causing inconvenience to international passengers too.

The government is working a plan to sell 100% stake in Air India after taking away all its working capital debt.

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