The Telegraph
Thursday , February 6 , 2014
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BP seeks licence to sell jet fuel

New Delhi, Feb. 5: Global oil major BP has applied for a licence to sell jet fuel at airports in the country, petroleum secretary Vivek Rae said today.

“They (BP) are looking at the marketing of aviation turbine fuel (ATF) and I think they have applied for a licence. They are entitled to it (retailing licence) and they will get this entitlement,” he said today.

Companies that have invested Rs 2,000 crore in the oil and gas infrastructure of the country are allowed to retail fuel.

BP, which has invested around $8 billion (nearly Rs 50,000 crore in current valuation) in the oil and gas sector, is eligible for a licence to retail petrol, diesel and ATF, though the London-based company has shown interest only in aviation.

Rae said ATF sale was a deregulated sector, and any company, which was able to tie-up the logistics, could enter the sector.

BP will be looking at selling fuel from the new airports that allow multiple retailers, unlike the older airports where the facilities are owned and controlled by state-owned companies.

Rae said BP was free to import the fuel, or buy it from local refiners.

However, analysts say, in the absence of its own pipeline, it will be difficult for the company to transport the fuel from the refinery or the port to the airport.

“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, including India. With that long-term intent, we would like to secure a licence to market ATF in India,” a spokesperson for BP said.

BP is also not keen on setting up petrol pumps in the country.

“BP’s potential entry in retail fuel marketing is entirely speculative. We have no such plans at the moment,” the spokesperson said.

In 2002, the government had allowed private companies to enter fuel retailing subject to minimum investment criteria.

Some companies such as Reliance Industries, Essar Oil and Royal Dutch Shell got licences and opened petrol pumps.

However, RIL shut its pumps and others went slow on expansion as the government gave huge subsidy to state-owned companies, making it impossible for private companies to compete.