Oil cos tell Jet, Kingfisher to pay up

Oil companies have told Jet Airways and Kingfisher Airlines to pay interest on all fuel bill dues outstanding beyond the credit period, failing which supplies would be discontinued from 4 February.

The state-run IOC, BPCL and HPCL added in their letter have written to the private airlines to clear the interest dues by Wednesday night, otherwise they would be put on cash and carry basis from Friday. Payment of interest on outstanding bills beyond the credit period was agreed as part of a one-time settlement reached in October last year.

Under that agreement, the outstanding on fuel bills was to be cleared in six installments payable monthly and future purchases were to be done on commercial terms. The three oil companies had given a 90-day credit period to private airlines on their current fuel purchases and they are now demanding clearance of all dues beyond this credit period.

Naresh Goyal's Jet Airways and Vijay Mallya-owned Kingfisher Airlines, along with state-run NACIL, together owed over Rs 2,000 crore in fuel bills to Indian Oil, Bharat Petroleum and Hindustan Petroleum as on 21 October, when the agreement was reached.