HPCL resumes fuel supplies to Kingfisher

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State-owned Hindustan Petroleum Corp Ltd (HPCL) on Thursday resumed oil supplies to Kingfisher Airlines after the beleaguered airline agreed to pay for daily fuel off-take.

HPCL, which is Kingfisher's biggest aviation fuel supplier, had stopped refuelling Vijay Mallaya-run airline at around 6 pm on Wednesday.

It decided to resume supplies after hectic negotiations, a senior company official said. "There is a certain financial discipline we have been following for past two years. And when some payments got delayed without any explanation, we had no option but to stop supplies," he said.

The two companies had hectic parleys through the night. "Even as we were talking, we decided to selectively refuel Kingfisher flights. So between 9 and 10 pm yesterday, HPCL refuelled their Mumbai-Hong Kong, Mumbai-Delhi and some other flights," he said.

Kingfisher, which owes Rs 515-520 crore in fuel bills along with interest, had not been honouring its daily fuel bills, prompting the state-owned oil firm to snap supplies.

Indian Oil Corp (IOC) supplies negligible quantities to Kingfisher while Bharat Petroleum Corp Ltd continues to sell fuel to Kingfisher Airlines on cash-and-carry basis at a couple of airports.

"We first cut supplies to Kingfisher for a couple of hours earlier this month. But it didn't help and we had to snap supplies," the HPCL official said.

"Full supplies have resumed early today." Kingfisher accounts for 47 per cent of HPCL's total jet fuel sales.