Ministry wants end to PSU oilcos' ATF monopoly

New Delhi: The aviation turbine fuel (ATF) market, till now the monopoly of public sector oil companies, could soon witness competition as the ministry of civil aviation has urged the Airports Authority of India (AAI) to develop common fuel infrastructure at airports and enable private oil retailers, such as Reliance and Essar, to enter the fray. The ministry has said throughput charge should not be the basis for awarding contracts to oil companies for supplying the fuel.
The move is intended to stop the trend of public sector oil companies, such as IOC, quoting a higher throughput charge to bag the contract and then passing on the extra burden to airlines. AAI awards fuel supply contracts to companies that promise the maximum throughput charge to it.
Airlines feel competition in ATF supply would lead to lower prices. They have been pushing for oil supply infrastructure to be converted into a common carrier so more players can enter this business. The civil aviation ministry is also supportive of this move as it could lead to some moderation in ATF prices in India, which are among the highest in the world.
“We have asked AAI to help us rationalise the fuel price in the country and bring it to international levels,” an official in the ministry of civil aviation said.
29/10/07 Nirbhay Kumar/Economic Times

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Categories: General Aviation Oct 2007