Metro airports to let in private oil cos

Private firms, including Reliance Industries Ltd, Essar Oil Ltd and Royal Dutch Shell Plc., will soon be able to sell jet fuel at metro airports despite not having their own supply depots as several such airports are planning to set up their own common fuel supplying facilities.
Such a common facility could help reduce investments in fuel supply logistics at these airports and could potentially cut the cost of jet fuel as well. It will also see the beginning of the end of a near-monopoly in sales of jet fuel at major airports by three state-owned Indian oil marketing companies.
Jet fuel accounts for about 40% of the operating cost of India’s domestic carriers, all of whom have collectively reported a loss of $500 million (Rs2,300 crore then) in 2006-07. The estimated annual fuel bill for the domestic airline industry is around $1.9 billion, based on rates prevailing in November. Fuel prices for domestic operations in India are 70-90% higher than international benchmarks.
Airports in Mumbai, Bangalore and Hyderabad are in the process of building fuel “farms” that can be used by all firms that are licensed to sell jet fuel. Delhi International Airport Ltd, a joint venture promoted by GMR Group-led consortium, is also exploring a similar infrastructure option.
19/12/07 P.R. Sanjai/Livemint

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Categories: Airports Dec 2007, New Dec 2007