RIL vs PSUs: Battle over jet fuel pipelines in Mumbai heats up
The battle over lucrative pipelines supplying jet fuel to Mumbai airport is heating up with a powerful formation of Reliance Industries and private airlines Jet Airways and Emirates trying to break the stranglehold of PSU oil firms BPCL and HPCL.
BPCL and HPCL built and operate two separate pipelines from their Mahul refineries in Mumbai to supply jet fuel (ATF) to airlines at the Chhatrapati Shivaji International Airport at Santacruz in the city.
Reliance, which produces a fourth of India’s aviation turbine fuel (ATF), wants access to these pipelines to be able to get a pie of ₹10,000 crore fuel trade that happens at one of Asia’s busiest airports. While Reliance and airlines feel competition among fuel suppliers would bring down costs, HPCL and BPCL said the pipelines are their “captive” infrastructure to take products out of the refineries and giving third party access to them would hurt their operations and profits.
Sector regulator the Petroleum and Natural Gas Regulatory Board (PNGRB) on May 4 supported the Reliance idea and sought industry comments on declaring pipelines as a common carrier and giving third parties
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access. If implemented, it would also an airline to import fuel and use the infrastructure at the refineries situated on the coast to transport it to the airport.
A company like Reliance can ship the fuel from its refineries at Jamnagar in Gujarat to Mumbai and use pipelines to take it into the airport. In its comments, Reliance said the present ATF demand at Chhatrapati Shivaji International Airport is 1.4 million tonnes per annum and it is “absolutely essential” that access to the BPCL and HPCL ATF pipelines is available to other jet fuel marketing oil companies to service this demand.
“Non-availability of access to the pipeline would deny to the ultimate consumers the benefit of competition,” it wrote to PNGRB last month.