Indian Carriers Owe State-Run Refiners $735 Million for Fuel

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Jet airways the nation’s largest domestic carrier, and other airlines owe state- run refiners 36.1 billion rupees ($735 million) for jet fuel as of Dec. 31, junior oil minister Dinsha patel said.

The airlines have paid oil refiners 13.7 billion rupees, Patel said in reply to a question in the upper house of parliament in New Delhi today.

Jet Airways and its rivals won more time in October to pay the dues as the government sought to ease pressure on carriers amid mounting losses after jet fuel prices rose 57 percent between January and August last year. The airlines were allowed to pay as much as 28 billion rupees they owed in six monthly installments by March.

State-owned National Aviation Co. of India owed 13.11 billion rupees, the minister said. Jet Airways had dues of 12.66 billion rupees and Kingfisher Airlines Ltd.  owned by India’s largest brewer, owed 10.3 billion rupees, according to Patel.

Indian Oil Corp. the nation’s largest refiner, was owed 21 billion rupees by the three airlines, Patel said. Bharat Petroleum Corp. was due 7.95 billion rupees and Hindustan Petroleum Corp. had to be paid 7.1 billion rupees.

Repeated defaults or delays in clearing the dues will force the refiners to supply the airlines jet fuel on a cash-and-carry basis, Patel said.

Indian Oil stopped selling jet fuel to Kingfisher Airlines on credit from this month after the carrier delayed payments on previous purchases, the refiner’s director of marketing G.C Daga said on Feb. 11.

Jet Fuel Prices

Jet fuel prices in India climbed to 73,673.56 rupees a kiloliter in August from 47,045.16 rupees at the start of last year in Mumbai, home to the nation’s busiest airport, according to Indian Oil’s Web site.

The prices have tumbled 59 percent since August. Airlines currently pay 29,985.19 rupees for a kiloliter of jet fuel in Mumbai,

Indian carriers are struggling as slowing economic growth curbs travel. Jet Airways’ passenger numbers declined in the quarter ended Dec. 31 as India’s growth cooled following the global recession and low-cost carriers led by Spice Jet Ltd.  lured travelers with cheap fares. That offset the benefit of the decline in jet fuel prices.

source : http://www.bloomberg.com

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~ by anand213 on March 1, 2009.

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