Air India owes Rs 4,500 crore in fuel dues; hasn’t paid in 200 days: Oil firms
Air India owes three state-owned oil firms close to Rs 4,500 crore in unpaid fuel bills with payments being delayed by almost seven months, forcing retailers to snap supplies, senior officials said on Friday. Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) on Thursday afternoon stopped jet fuel or ATF supplies to Air India at six airports – Kochi, Pune, Patna, Ranchi, Vizag and Mohali – over payment defaults. “Air India has a 90 day credit period, which means they have to make payment for fuel they buy today by November 21. But Air India had not been making payments and the credit period was now over 200 days,” a senior official at one of the three state-owned oil firms said. Total unpaid dues to three fuel retailers stand at close to Rs 4,500 crore. “They (Air India) offered to pay Rs 60 crore which is a drop in the ocean of what they owe,” another official at one of the fuel retailers said. IOC, BPCL and HPCL more than a week back jointly wrote to Air India seeking expeditious clearance of the dues, failing which they will be constrained to take action. “Air India however failed to provide a clear roadmap to clear dues, forcing us to stop supplies,” the official said. Another official said Air India gets financial support from the government while for oil firms there is no such help. “Aviation Turbine Fuel (ATF) pricing was deregulated in April 2002. And since then we have to run this business without any subsidy support from the government,” he said. At present, the government only provides some subsidy on LPG to help roll out its ambitious Ujjwala scheme of providing free cooking gas connections to poor. There is also a subsidy on kerosene supplied through the public distribution system (PDS). A senior Air India official had on Thursday said that oil firms stopped fuel supplies to the airline at Cochin, Visakhapatnam, Mohali, Ranchi, Pune and Patna around 4 pm. Air India spokesperson had on Thursday stated that “in the absence of equity support, Air India cannot handle the huge debt service liabilities”. “Our financial performance, however, this fiscal is very good and we are moving towards a healthy operating profit. The airline despite its legacy issues is performing very well,” he had added. Air India has debt of over Rs 58,000 crore.
ONGC to drill 46 wells in Mehsana Asset at the cost of Rs 500 crore
Oil and Natural Gas Corporation (ONGC), the country’s largest producer of oil and gas is planning to drill 46 exploratory wells in 12 onshore Mining Lease (ML) blocks in Mehsana district in Gujarat at the cost of Rs 500 crore. “ONGC has identified 46 wells for Exploratory drilling in 12 onshore ML blocks in Mehsana district, Gujarat covering Linch, Shobhasan, Kadi and Mansa oil fields,” the company said in an application seeking environmental clearance from the Ministry of Environment, Forest and Climate Change (MoEFCC). ONGC said hydrocarbon reserve data obtained from various oil fields drilled in the region have shown very encouraging results and a lot of scopes still exists in exploring new sub-surface structures in the area for hydrocarbons. The company has so far drilled more than 500 wells in Mehsana asset, including exploratory wells. Oil minister Dharmendra Pradhan on Thursday laid the foundation stone for ONGC’s North Kadi Polymer project, the second heavy oil polymer flooding project being developed by the company in Mehsana asset. According to the company’s 2018-2019 annual report, ONGC had initiated a pilot heavy oil polymer flooding project in Bechraji oil field. The company’s crude oil production from onshore fields in the state of Gujarat has been on a steady rise in the last few years, data provided by the oil ministry showed. ONGC’s crude oil production from onshore fields in Gujarat in the first four months (April-July) of the current financial year (2019-2020) increased 2.19 percent to 1,537 Thousand Tonne, as compared to the corresponding period a year ago. The company had earlier in April also applied for environment clearance for drilling 145 development wells across 30 mining leases in the Cambay basin at the cost of Rs 2,393 crore. The company plans to spend close to Rs 32,920 crore in the current financial year (2019-2020).