Reliance gets two-year extension to sell jet fuel

Vol 7, PW 20 (17 Dec 04) Midstream & Downstream

Reliance has written to the oil ministry asking for a two-year extension to its licence to sell transportation fuels, among them jet fuel.

We shall be grateful for your extension of the authorisation for our aviation turbine fuel marketing rights for another two years effective 1st December 2003, writes Reliance on 30th September. Two years ago on 7th December the government granted Reliance a licence to sell transportation fuels.

Under the Aviation Turbine Fuel Regulation of Marketing Order 2001, Reliance was given a licence to sell jet fuel for a period of two years to 30th November this year. However, Reliance has been unable to sell even a drop of jet fuel over the last two years because of strident opposition from state companies who control the market at Indian airports.

Reliance is having problems breaking this monopoly and has written several letters to the oil ministry demanding that existing refuelling systems at airports be classified as Common Carriers. Reliance argues that construction of new jet fuel dispensing systems would mean ripping up runways at busy airports in Mumbai and Delhi, causing untold disruption.

Reliance believes sharing existing infrastructure is the only way to monetise its jet fuel sales licence. But state companies see Reliance as a threat to be opposed at all costs.

Led by Indian Oil, they say they have invested considerable sums of money in airport fuel stations and do not want this infrastructure to disappear into a common pool, adding there are no global precedents for sharing jet fuel dispensing systems at airports. Support for Reliances position comes from parliaments standing committee on petroleum.

In its recommendations on the Petroleum Regulatory Board Bill, the panel wants storage terminals and airport refuelling systems to be reclassified as Common Carriers. But Shastri Bhawan has rejected this suggestion in the revised Bill that should be passed by parliament this session.

Opposition from the ministry would normally be enough to put off most companies, but not Reliance. Following its 30th September letter, the company wrote two reminders in October and November.