Govt to consult IOC on Kingfisher's plea for jet fuel import
The government will consult Indian Oil Corporation before taking decision on Kingfisher Airlines' request for direct import of the jet fuel which will help the crisis-ridden carrier to save taxes and costs.india Updated: Nov 17, 2011 19:53 IST
The government will consult Indian Oil Corporation before taking decision on Kingfisher Airlines' request for direct import of the jet fuel which will help the crisis-ridden carrier to save taxes and costs.
"We will ask the IOC. They will recommend, though their recommendation is not binding on us," director general of Foreign Trade (DGFT) Anup Pujari said.
As per the Foreign Trade Policy, only state trading enterprises like IOC are allowed to import the ATF. However, DGFT has powers to "grant an authorisation to any other person to import any of these goods...on the grounds of genuine hardship".
The DGFT is yet to receive the Kingfisher's application seeking permission for direct import of Aviation Turbine Fuel (ATF), he said. Kingfisher had said on November 15 that it has made an application to DGFT.
Asked whether government can permit policy relaxation, the DGFT said the foreign trade rules do allow for this. But, the applicant has to prove it is facing "genuine hardship".
Pujari, however, sounded cautious stating "this way, others may also seek similar exemptions..."
They may not be in a crisis situation as Kingfisher, but most of the airlines are in dire financial state. Kingfisher reported a net loss of Rs 468.66 crore for the second quarter ended September 30. It has a debt of over Rs 6,000 crore.
Jet Airlines which has bigger fleet and wider operations also posted a net loss of Rs 714 crore and the Spicejet bottomline was bleeding by Rs 240 crore.
It is estimated that jet fuel costs are almost 50% of the total operating expenses of the airline.