Reliance, Mrpl & Essar Oil Submit Eois For ...

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http://economictimes.indiatimes.com/articleshow/856341.cms

CUCKOO PAUL

TIMES NEWS NETWORK[ MONDAY, SEPTEMBER 20, 2004 12:37:16 AM ]MUMBAI: The aviation fuel business in India, so far the bastion of the three public sector oil companies, will soon see a wave of new entrants. The Airport Authority of India (AAI) has invited expressions of interest from oil companies for setting up aviation fuel stations at 72 airports.

Among those who have put in EoIs, apart from the existing players, are Mangalore Refinery and Petrochemicals (MRPL) and Reliance Industries (RIL). Essar Oil has separately applied to the ministry of petroleum for permission to market the fuel. The company’s licence has so far been limited to petrol and diesel.

The AAI tender is for one-time permission to put up the facilities which effectively gives an oil company a natural monopoly over a particular airport.

The move has raised hackles in the industry because AAI plans to levy throughput charges on the fuel sales.

The oil industry, hitherto dominated by IndianOil (IOC), Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL), had never paid any such charges. They pay a lease to the AAI even at Mumbai and Delhi airports, which amount for over 50% of the ATF sold in the country. “The AAI is pushing for a charge and the oil companies are resisting it,” a source said.

Oil industry officials said ONGC is very keen to market ATF, through its refining subsidiary MRPL. The upstream oil company also produces some ATF at its Hazira facility. The product can be sold at Bhuj and other airports in Gujarat and has been approved by the civil aviation regulator, the Directorate General of Civil Aviation (DGCA).

However, ONGC is yet to get approval from the defence quality control department. The bulk of the ATF will come from MRPL, which produces as well as exports ATF every year.

MRPL officials say “margins on domestic ATF sales are much better than exporting the product at a loss (the export parity price).’’ The company will initially try to have a base at airports in and around Karnataka.

The other private refiner Reliance has been trying to get into the ATF business for the past two years, without any success. The company has reportedly put in an EoI for airports in Gujarat and western India that are close to its refinery supply lines.