Indian Oil Asks Essar Power To Pay Cash For Fuel Supply

Indian Oil has now put Essar Power on cash-and-carry basis for all future supplies of fuel.

Indian Oil and Essar Power at Hazira had entered into an agreement for supply of naphtha for the power plant. Essar Power owes Indian Oil Rs 11.63 crore for the fuel supplied by the corporation.

According to a report prepared by Indian Oil's divisional office in Ahmedabad after a meeting with Essar Power and GEB representatives, Essar confirmed it had no money to pay to Indian Oil unless GEB makes payment to it (Essar Power).

Though Indian Oil threatened to cut off fuel supply to Essar Power in case outstandings were not cleared, GEB requested that IOC should maintain supplies in the interest of the state, as well as, also keeping in view long association GEB has with Indian Oil.

 

Indian Oil, however, stuck to its stand that unless it receives the payment, it would not be able to make further supplies of fuel to Essar. According to the report, during informal discussions after the meeting, Essar Power officials said they did not have sufficient funds to pay Indian Oil.

The officials proposed to take up with state power ministry to bring the pressure to bear upon GEB and Indian Oil for continuation of the arrangements.

He (Essar Power official) also advised that Essar is not making any money in this deal with GEB and, in case, Indian Oil does not supply fuel, it will not affect them financially, the report said.