AAI plans to set up JVs with public, private oil companies to meet jet fuel requirements

NEW DELHI: State owned airport operator Airports Authority of India ( AAI) plans to set up joint ventures with public and private sector oil companies and airlines to meet jet fuel requirements of air carriers in remote regions of the country.

The idea of this arrangement was discussed in the presence of Petroleum Secretary and various oil companies including Reliance Industries, Agrawal said he said Tuesday.

AAI will hold a 13 per cent stake in joint venture with other companies being free to decide on how much stake they would like to hold among themselves, AAI chairman V P Agarwal said.

""Take Kangra, it does not have a fuelling facility. Somebody flying from Delhi has to carry the fuel from the national capital to be able to come back. This unnecessarily disturbs the economics. The other objective is that less space is occupied by oil companies otherwise everybody duplicates. We will create sufficient capacity so that everybody puts their oil in it," he said.

AAI will write to the airlines to participate in the proposed JV and it is for the airlines to be part of the joint venture, Agrawal said.

The ministry of civil aviation has also expressed concern over the fact that 98 percent of the ATF supply is done by the 3 big PSUs, with most infra owned by them. ""They price ATF uniformly, leaving no scope for competition and aviation ministry took up the issue with the petroleum ministry and petroleum and natural gas regulatory board or PNGRB" economic advisor to the aviation ministry M Kannan said.

Jet fuel constitutes almost 60 percent of the operating costs for Indian carriers, as opposed to 40 pc in other countries owing to high taxation.