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Govt turns down Reliance plea on ATF marketing

The government has rejected Reliance Industries' plea for being allowed to use public sector oil companies' infrastructure to sell jet fuel (aviation turbine fuel) saying it does not fall under the common carrier principle.

"But for pipelines, common carrier principle does not apply to marketing network. ATF storage and distribution facilities of public sector oil marketing companies will not be available for pooling private sector products," government sources said.

Reliance, in its application, wanted to pool upto 3.6 million tonnes of jet fuel in existing ATF storage and distribution infrastructure for sale to airlines.

"They (Reliance) have already been granted authorisation to market jet fuel from 103 locations. If they want to retail jet fuel to airlines, they would have to put up infrastructure on their own or enter into commercial agreements with present incumbents," sources said.

For new entrants, retailing jet fuel to airlines would mean putting up tankages and refuelling facilities at airports. Besides land being scarce at already cramped airports, putting up such facilities would involve an array of environmental and safety clearance from a number of authorities.

To avoid the cumbersome process, Reliance proposed that it would transport jet fuel from its Jamnagar refinery in Gujarat to the airport through tankers or existing pipeline infrastructure and use state-run oil companies' facilities at airports for storage and sales.

"If Reliance wants they can build infrastructure at some distance from airports and use mouser tankers for refueling aircrafts," sources added.

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