Direct ATF import by airlines still a distant dream

New Delhi/ Mumbai: The government’s decision to allow cash-strapped domestic carriers to import cheaper aviation turbine fuel (ATF) directly has skidded on the runaway.
While many airlines are keen on this issue, these do not have the expensive infrastructure needed to import and store the fuel. Also, public-sector oil companies that control the port and airport infrastructure for ATF (tankers, pipelines for transportation, refuelling facility at airports) are not keen to share these with airlines. This is because selling ATF to domestic carriers is a profitable business.
The relaxation was aimed at providing respite to domestic carriers which had to mandatorily buy ATF from public-sector oil companies and pay substantial sales tax — averaging 22-24 per cent — making the fuel one of the most expensive in the world. By importing it directly for its own consumption, airlines can save up to Rs 13,000 on every tonne of ATF at current prices, or Rs 2,500 crore a year.
While aviation minister Ajit Singh says he expects public-sector oil companies to help domestic carriers, executives of Hindustan Petroleum Corporation and Indian Oil Corporation say they are not talking to anyone, and that the onus lies with carriers. “We are not discussing with any airline. The government has allowed them to import ATF directly, they can do what they want,” said a senior HPCL official.
11/03/12 Surajeet Das Gupta Mihir Mishra & Aneesh Phadnis/Business Standard

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Categories: Indian Aviation- In General Mar 2012