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Sun, Feb 12, 2012

India's Bureaucracy Struggles With Fuel Issues

Faltering Airlines May Be Allowed To Dodge Domestic Fuel Taxes

India's civil aviation ministry is asking another government bureau, the petroleum ministry, to do something to stop jet fuel suppliers from refusing deliveries on short notice to airlines which are struggling financially. The practice has disrupted flights and stranded passengers when planes couldn't refuel. reports Air India and Kingfisher Airlines have both had fuel supplies snapped because they defaulted on payments to three Indian oil companies. On February 3, Air India was unable to refuel its planes at several locations on notice of only two hours, disrupting more than a dozen flights.

In an interesting twist, India's Group of Ministers is said to be considering allowing the airlines facing financial problems to import their fuel, bypassing India's state-run oil companies and their high taxes. Doing so would require an up-front expenditure by the airlines to create the necessary infrastructure. Such a change would require cabinet-level approval, and Kingfisher Airlines says it will import fuel if allowed.

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