BP seeks licence to sell jet fuel in India
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BP seeks licence to sell jet fuel in India

Last Updated: Wednesday, February 5, 2014, 19:47
 
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BP seeks licence to sell jet fuel in India
New Delhi: BP Plc, Europe's second-largest oil company, has applied for licence to retail jet fuel or ATF at airports in India, Oil Secretary Vivek Rae said Wednesday.

Having invested close to USD 8 billion in India's oil and gas sector, BP is eligible for a licence to retail petrol, diesel and ATF but the London-based firm is keen to enter the aviation space for now.

"They (BP) are looking at marketing of aviation turbine fuel (ATF) and I think they have applied for a license," Rae told reporters here.

BP made the application for ATF retailing last month.

Fuel retailing in India is permitted to companies who have invested Rs 2,000 crore in oil and gas infrastructure in the country.

"They are entitled to it (retailing license) and they will get this entitlement," Rae said.

A BP spokesperson confirmed BP's intent to enter into the aviation business through the company's subsidiary, Air BP.

"Air BP, our global aviation services division continues to grow in new locations. As part of this growth, we plan to expand our footprint into material emerging markets in the world, including India. With that long term intent, we would like to secure a license to market ATF in India," the spokesperson said.

BP, the spokesperson said, was not interested in auto fuel retailing (setting up petrol pumps) in the country. "BP's potential entry in retail fuel marketing is entirely speculative. We have no such plans at the moment."

Rae said ATF sale is a deregulated sector and any company which is able to tie-up logistics can enter the sector.


While jet fuel bunkering at most of the airports in the country are owned and controlled by state-owned firms, the refuelling infrastructure at new airports being built by private firms is bid out and allows third party access to the infrastructure.

"BP can either buy ATF from local refineries like Reliance Industries or can import. That is not an issue," Rae said.

The third party access to the storage and refuelling infrastructure at the airports would allow BP access but the challenge would be to arrange for logistics to carry the fuel from refinery or port of import to the airport because unlike state-owned firms, BP does not own pipelines to transport it.

India had in 2002 allowed private companies entry into fuel retailing subject to the minimum investment criteria. Reliance Industries, Essar Oil and Royal Dutch Shell got licences and opened petrol pumps.

However, RIL shut pumps and other companies went slow on expansion as government gave huge subsidised to state-owned firms, practically making it impossible for private companies to compete.

BP, which in 2011 bought 30 percent stake in 21 oil and gas blocks of Reliance Industries, including the Krishna Godavari basin D6 gas fields for USD 7.2 billion, has a three year old agreement with Indian Oil Corp for servicing aviation facilities.

An IOC executive said however that the agreement does not entail retailing of the fuel and the state-owned firm had no proposal to tie-up with BP for ATF marketing.

"That agreement with BP was for servicing of aviation facilities alone," he said.

BP had also formed a 50:50 joint venture with RIL for sourcing and marketing of gas.


PTI

First Published: Wednesday, February 5, 2014, 19:47


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