Vivek Ray told the press “They (BP) are looking at marketing of aviation turbine fuel (ATF) and I think they have applied for a license”
The application from BP was made in January. They are very hopeful for its success as companies that have invested Rs 2,000 crore or more in India’s oil & gas industries are permitted to sell the fuel.
Rae confirmed this by stating, “They are entitled to it and they will get this entitlement,”
A representative for the oil company established their intent to enter into this new field of aviation via the branch of the company known as Air BP. They said “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,”
He also cleared up speculation regarding BP’s intent in regards to retailing auto fuel (through gas stations), saying, “BP’s potential entry in retail fuel marketing is entirely speculative. We have no such plans at the moment.”
The current jet fuel retailing is mostly held by state owned companies, but there are a new wave of airports being constructed by private firms that bid out their fuelling infrastructure. This allows companies like BP to get in on the action.
“BP can either buy ATF from local refineries like Reliance Industries or can import. That is not an issue”, Rae stated.
Unlike existing state owned firms, BP do not own any pipelines in the company, so their challenge would be arranging transportation & logistics to move the fuel from the point of import (refinery or port) to the airports.
The Indian government has often made it hard in the past for private companies to get a hold in their fuel infrastructure. In 2002 they first allowed private companies in, subject to the minimum investment requirements. Companies such as Royal Dutch Shell, Essar Oil and Reliance Industries but most were forced to close their pumps & their growth was stunted because the government favoured the state owned firms, giving them huge subsidies.