Click to play videoNew Delhi: Petroleum Minister Murli Deora has called a meeting on Wednesday with Civil Aviation Minister Praful Patel, airlines and oil companies to sort out the issue of default in payment of fuel bills by airlines.
Domestic airlines currently owe over Rs 1,000 crore to PSU oil retailers.
Deora said the airlines as well as the oil companies are facing a credit crunch and a way needs to be found out to ease their liquidity problems.
"Government has done a lot for the airlines facing credit crunch. Oil companies have don their best to help - especially Jet and Kingfisher. But our oil companies themselves need funds and credit so we are trying to find solution where oil companies don't suffer as well as airlines are in the sky," Deora said.
Meanwhile, crude prices which have been falling recently because of anticipated slow down in growth and demand could rise again because of production cuts.
Iran's Oil Minister has said that drop in demand could push Organisation of the Petroleum Exporting Countries (OPEC) to cut output by 2 to 2.5 million barrels per day.
The OPEC meets on Friday in Vienna amid pressure for a production cut. Oil prices have fallen to half their July peak of $147 a barrel to about $74.
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