ATF demand to grow 20 per cent in 5 years

Mumbai: Based on the fast growth in the aviation sector, the demand for jet fuel is expected to grow at 15-20 per cent in the next five years.
On the back of the booming aviation sector, the aviation turbine fuel (ATF) industry is also witnessing positive growth.
As of now, India is self-sufficient in catering to the increasing demand for jet fuel. However, in future, oil companies may have to opt for imports to meet the rising demand.
In the last five years, the compounded annual growth rate in passenger traffic volume has been 15 per cent, and in 2005-06, it peaked at almost 28 per cent. The ATF industry, which is almost 100 per cent corelated with the airline industry, had also enjoyed a similar growth.
In 2006-07, global consumption of ATF was 3.5 billion tonnes. Compared to this, the consumption in the Indian market was around 5 million tonnes.
Between 2004-05 and 2005-06, the demand for ATF had grown 16 per cent and the growth is expected to be sustained at 15-20 per cent over the next five years.
Indian Oil Corporation (IOC) is the market leader in the Indian ATF market with 64 per cent share. However, ATF sale volumes - at 3 million tonnes - were only a small fraction of the 49 million tonnes of petroleum products IOC sold in 2006-07.
It is noteworthy that for oil companies, the margin on sale of ATF is between Rs 1-1.50 per litre. For public sector units, which incur considerable under-recoveries and negative retail margins on sale of other petroleum products like petrol, diesel and kerosene, ATF is positively a revenue earner. But refining companies feel that this cannot be reason enough for them to expand their refining capacities for ATF alone.
16/05/07 Sumana Guharay/Business Standard

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Categories: General Aviation May 2007